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REPORT 


OF THE 


COMMISSIONERS 

# 


INVITED BY THE 

/ 

CANAL BOARD OF THE STATE OF NEW YORK, 


JULY lOth, 1877. 


TO CONSIDER AND REPORT ON THE SUBJECT OF TOLLS CJPON THE 
CANALS, HAVING REFERENCE TO 1TIE SUBJECT OF REVE¬ 
NUES, AND ALSO TO INCREASING THE COM¬ 
MERCE OF THE CANALS. 



DAVID Acf^VELLS, 

L. J. N. STARK, 
WILLIAM THURSTONE, 


Commissioners. 


ALBANY: 

WEED, PARSONS & COMPANY, PRINTERS. 

1878. 







At a meeting of the Canal Board, held at the Canal Department, 
the 13th day of February, in the year 1878, 

Present: The Lieutenant-Governor, Secretary of State, Treas¬ 
urer, and Attorney-General. 

Messrs. David A. Wells and William Thurstone, of the commis¬ 
sion appointed by this board, July 10, 1877, “to consider the sub¬ 
ject of tolls upon the canals,” presented their report. 

On motion of the Attorney-General, the report was ordered to 
be printed in full in the minutes of the board. 

On motion of the Treasurer, it was ordered that eight hundred 
extra copies be printed in pamphlet form. 


Adjourned. 


State of New York : 


Canal Department, 
Albany, February 16, 1877. 


} 


At a meeting of the Canal Board, held at this department, on 
Tuesday, July 10, 1877, the following was adopted : 

“ The undersigned respectfully report that they recommend that 
David A. Wells, Lucius J. N. Stark and William Thurstone be in¬ 
vited to act as a commission to consider the subject of tolls upon the 
canals, and report at their convenience to this board, having refer¬ 
ence in such report to the subject of revenues, and also to increas¬ 
ing the commerce of the canals.” 


WILLIAM DORSHEIMER, 
F. P. OLCOTT, 

CHAS. M. ROSS, 


Commissioners. 


W. McGOURKEY, 

Deputy Auditor. 


REPORT. 


Albany, February , 1878. 

To the Canal Board of the Stale of New Yorh: 

The undersigned, having in accordance with the above invitation 
consented to act as a commission for the purposes indicated, do here 
present the following report: 

Although the topics for inquiry specified in the above letter are 
apparently limited, they really involve a larger, and in fact, the 
only important question at issue, namely: What shall be the 
'policy of the State in the future in respect to the Erie canal, and 
the other canals adjunct or lateral to the same , the ownership {and 
inferentially the management) of which is by the Constitution of 
this State , made obligatory on the State f To help answer this 
question it is important to first briefly consider. What the Erie 
canal and its adjunct and lateral canals are f What have been 
their costs and revenues f and what the services they render or are 
capable of rendering f 

What is the Erie Canal? 

The Erie canal is the largest and most important canal in the 
United States, and outside of China, in the world. It forms the 
connecting link of water navigation between the Hudson river and 
tide-water at Albany and Troy and the chain of inland lakes, or 
seas, which extend to the center of the continent; connecting with 
Lake Erie at Buffalo and with Lake Ontario at Oswego. Its length 
from Buffalo to Albany is 352 miles (to West Troy 347 miles). 
The entire canal system of Hew York (and all the canals of the 
State are a part of one system) has a lineal length of 906.95 miles 
navigable water way and feeders. 

The construction of the Erie canal was commenced in 1817. It 
was opened to navigation to Buffalo in 1825, and to Oswego in 
1828. As originally constructed, it had a width of forty feet at the 



6 


surface; a depth of four feet; and a capacity for boats of seventy- 
six tons, as a maximum. Before its completion the average time 
occupied in the transportation of freight between Albany and Buf¬ 
falo was about twenty days, at an average cost of at least, seventy- 
five dollars per ton. In 1876, the average time for the movement 
of a ton of freight from Buffalo to Albany was eleven days , at an 
average cost (freight and tolls) of $2.04 per ton. 

The development of commerce on the line of the canal increasing 
after its opening, with a rapidity that far surpassed the anticipa¬ 
tions of the projectors of the canal, cheaper transportation and 
greater capacity were both demanded ; and accordingly between 
1835 and 1862, the canal was enlarged to such an extent that it is 
now (in theory *), seventy feet wide at the water-line, fifty-six feet 
at the bottom, with a depth of seven feet; and a capacity for boats 
of 240 tons burden ; although the average cargo transported is con¬ 
siderably less, namely: 213 tons (average) in 1873 ; 197 tons in 1874 
and 1875 ; and 209 tons in 1876. The reported immediate results 
of the enlargement were to increase the capacity of the canal from 
an annual tonnage movement of fi/ve millions to sixteen millions ; 
and to reduce the cost of transportation to the extent of about one- 
half. In 1876, a system of double locks was completed and brought 
into use along the entire length of the Erie canal. The theoretical 
capacity of the Erie canal, as it is at the present time, is probably 
three or four times greater than the largest tonnage than has ever 
in any one year moved upon it. 

Fiscal Results of the Erie Canal. 

The first cost of the Erie canal was estimated (in 1825-26) at 
$7,143,000. 

Fiscal Results of the First Forty Years , 1826-1866.—By a 
report made by the Auditor of the Canal Department to the New 

* “ The water-way was practically never excavated in every part to its proper 
dimensions. Time, the action of the elements, and neglect of administration, all 
tend to fill it with deposits.” Message of the Governor of New York , January , 
1875. 

The dimensions of the canals between Lake Erie and Montreal agreed upon by 
the Dominion government in 1870, were one hundred feet width at bottom, with 
locks two hundred and seventy feet long between the gates, forty-five feet in width, 
and a depth suited to the passage of vessels drawing twelve feet of water. By 
instructions issued to the chief engineer of the board of public works of Canada 
in 1875, it was directed that all the more important permanent structures on the 
Welland and Lacliine canals “should be adapted to a depth of water correspond¬ 
ing to fourteen feet on the miter sills of the locks.” 




7 


York constitutional convention in 1867, the total expenditures, up 
to the close of the fiscal year 1866, on account of the Erie canal, 
i. e ., for construction, enlargement, maintenance and repairs, with 
interest, were $140,430,953. 

The receipts from tolls, with interest, during the same period, 
from the Erie canal, were $181,828,604. 

It appears, therefore, that the Erie canal at the close of the fiscal 
year 1866, had, during the then forty years of its existence and 
operation, not only repaid from the receipts for its use, every dollar 
expended upon it, but had yielded, in addition to the State Treas¬ 
ury, a surplus of $41,397,651. All this large sum, and some sev¬ 
eral millions additional, had, up to that time, however, been ab¬ 
sorbed in the construction and maintenance of the Champlain and 
the lateral canals, the expenditures on account of which had ex¬ 
ceeded the receipts, from tolls for their use, by the sum of 
$48,871,643. 

The general result of the engaging by the State in the business 
of canal construction and management up to the year 1866 had, 
therefore, resulted in a direct loss of $7,473,922. 

Fiscal Results of the Erie and Champlain Canals for the Twen¬ 
ty-six Years prior to 1872.—From a statement made by the State 
Auditor to the legislature in March, 1873, it further appears that 
during the twenty-six years ending with the fiscal year 1872, the 
total receipts from the Erie and Champlain canals amounted to 
$81,952,010; and that the total expenditures for administration, 
maintenance and repairs, and damages were $22,075,570; showing 
a net income of $59,876,440, or 73 per cent of the gross income 
during the period under consideration. 

If the State of New York had run the Erie and Champlain 
canals as a business investment, it would have realized an annual 
average net profit for each and every one of the twenty-six years 
prior to 1872, of $2,148,410. 

Fiscal Results of the New York Canals from 1860 to 1870, in¬ 
clusive. —By report of the State Auditor (January, 1878), it appears 
that the aggregate surplus revenue derived from the New York 
canals during the eleven years from 1860 to 1870, inclusive, was 
$30,804,610. Of this surplus, $16,048,783 were actually applied 
to the payment and reduction of State (canal?) interest bearing 
debt, and the balance to the payment of interest and for the con¬ 
tributions required by the constitution towards the support of the 
State government. 

Fiscal Results from 1869-70 to 1872-3, inclusive. —Coming 


8 


down to a later period, the fiscal results of the entire canal system 
of New York, for the four years ending September 30,1873, appear 


to have been as follows: 

Receipts from tolls.$11,976,512 

“ “ Miscellaneous, water rents, etc. 355, 250 

Total.$12, 321, 762 


The disbursements for maintenance and ordinary repairs for the 
same period were $9,889,078, leaving a balance in favor of the 
canals of $2,432,684. 

There were, however, disbursements for extraordinary repairs 
during this same period, which amounted to $6,385,049; which, 
included in the total for the four years, gave an aggregate of 
$16,274,128 total expenses, and created a balance adverse to the 
canals for the period under consideration of $3,952,366, or at an 
average of $988,090 per annum. 

During the same four years there was a charge against the canals 
for interest of $2,715,240. Including this amount, the total of 
charges and disbursements against the canals for the four years 
ending September 30,1873—exclusive of any constitutional liabili¬ 
ties for contributions for the payment of any debts, and for the sup¬ 
port of the State government—becomes $18,989,368; and the de¬ 
ficiency of receipts to meet such charges and disbursements rises to 
$6,707,606. Including the constitutional obligations imposed on 
the canals for annual payments, the deficiency would have to be 
represented by much larger figures; but, whatever it was, it was 
met by the proceeds of general State taxation. 

The receipts from all the lateral canals (except the Champlain 
and Oswego canals) were, for the four years ending September 30, 
1873, $285,767.76; and the disbursements for their maintenance 
and administration during the same period, $3,652,715, leaving a 
deficiency of $3,366,947. 

The receipts from tolls from the Erie, Champlain and Oswego 
canals on the other hand, for the four years ending September 30, 
1873, were $11,745,777 ; and the disbursements (ordinary repairs 
and maintenance, $5,127,918; extraordinary repairs, $4,930,350), 
were $10,064,269 ; leaving a balance to the credit of these canals 
for this period of $1,681,508. 

It is therefore apparent that although the average receipts for the 
use of the canals (tolls and water rents) for each of the years from 
1868-9 to 1872-3 exceeded the large sum of three millions of dollars 








9 


per annum, the general fiscal result of canal ownership and man¬ 
agement to the State during these years was eminently disastrous. 

During all this period, and before, the rates of toll maintained 
and collected by the State were high. During the season of 1869, 
the toll on wheat from Buffalo to Troy was 06.2 cents per bushel, 
and on corn to September 19, 04.8 cents per bushel. During the 
past season (1877) the ruling rates for canal freights (tolls included) 
from Buffalo to New York were for a considerable period under 
six cents per bushel for wheat, and four and one-half cents and 
less for corn. The tolls, therefore, paid on the movment of wheat 
and corn on the Erie canal for 1869 were more than it cost (tolls 
inclusive) to move the same property during a portion of the season 
of 1877. In 1870 there was a notable reduction of the canal tolls; 
but from 1870 to 1874 inclusive the toll on wheat from Buffalo to 
Troy was 03.1, and on corn 03.0 cents per bushel, while the rates 
for freights (tolls included) from Biffalo to New Yorh , during a 
part of the season of 1877, were as low as five and five and one- 
quarter cents per bushel for wheat and four and four and one quarter 
per bushel for corn. 

The administration and results of the management of the canals 
of the State of New York for the four years prior to and including 
1873, were, to say the least, something extraordinary. What would 
have been the result had the tolls on the canals been reduced as 
early as 1860 to a rate not exceeding ten per cent on the cost of 
moving the property with a profit to the transporters or forwarders, 
it may not now be easy to fully state. But, judging from the expe¬ 
rience of the past year, it is certain that the canals would have 
retained a vast amount of business which has gradually left them 
and gone to the railroads ; that a large amount of railroad construc¬ 
tion which has since been made, would never have been projected ; 
that the economy in the maintenance of the canals, which has since 
been forced, would have been earlier entered upon ; and that a vast 
amount of taxation, direct and indirect, not only on the people of 
the State of New York, but on the whole country, would have 
been prevented. 

Since and including 1873, the receipts and the expenditures of 
the canals of the State of New York, for administration and all 
repairs, have been as follows; the period covered being one in 
which the business of canal transportation, owing to continued and 
unusual business depression and severe railroad competition, has 
been carried on under circumstances as unfavorable as are evei 
likely to be again experienced : 


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n 


The above table does not include any constitutional obligations 
imposed on the canals for payments on account of the interest or 
principal of any debts, or for the support of the State government. 
These obligations for the fiscal year 1877, according to the Canal 
Auditor (Report January, 1878, p. 9), were specifically and in the 
aggregate as follows : 


To pay the interest of the debt, in coin . $577,210 

To contribution to the sinking fund. 450,000 

For the support of the State government. 200,000 


Total.$1,227,210 


It would, therefore, appear from the above tables and analysis, 
that in every year from 1873 to 1877, inclusive, a period of five 
years, covering a remarkable depression of all business, the receipts 
of the canals, from all sources, even with the drag of the lateral 
canals, have been sufficient to meet the cost of collection and su¬ 
perintendence, and all ordinary expenditures, and leave a surplus 
available for other purposes. 

But with the added charges for extraordinary repairs, for inter¬ 
est on the canal debt, for payments ( sinking fund ) on the princi¬ 
pal of such debt, and for a contribution, required by the constitu¬ 
tion, of $200,000 annually for the support of the government, 
there has always been for each of the years under consideration, a 
large annual deficiency in the canal exchequer, which has had to be 
met by the appropriation of moneys raised by general taxation. 
And the amount actually raised by taxation, and appropriated to 
meet such deficiencies, during the four years from 1873 to 1876 in¬ 
clusive, has been (according to report of the canal auditor for 1878), 
$9,393,603. It is pertinent, therefore, to consider next, in brief 
detail the nature of these additional charges, which have constituted 
in the past, as they do at present, the real burden of the canals 
upon the State. 

Extraordinary Expenditures — And first we have always appear¬ 
ing the item of expenditures for extraordinary repairs. Let us in¬ 
quire in what they consist. That they are extraordinary in amount 
needs no demonstration ; for the figures in the above table speak 
for themselves. In respect to character they are thus described by 
the State Engineer, in his annual report for 1876, p. 17. “Under 
this designation,” he says, “ it has been customary to class all 
unusual repairs to, and changes in the canals and their important 
structures. Provision for the cost of these works has heretofore 









12 


been made by special appropriation of funds raised by general taxa¬ 
tion. All repairs necessary to maintain the canals in an efficient 
condition, should be classed as ordinary repairs , and paid out of 
the canal revenues ; which under an economical administration 
are , even now , ample for the purpose. Large appropriations have, 
heretofore, been annually made for special local improvements not 
necessary for the purpose of navigation, nor adding in any degree 
to the efficiency of the canal system. The State is in no wise bound 
to provide for any such improvements. The expenditures for these 
purposes have been charged against the canals, and but for them, 
their present financial condition would be much more satisfactory 
than it now is. The expenses of such improvments should be borne 
by the communities or parties specially interested, and not by the 
State.” 

It is to be presumed that a person competent to be State Engin¬ 
eer for the State of New York knows whereof he speaks in his 
official reports, and speaks the truth. And if the statement in the 
above quotation from his report for 1876 ( repeated in the report for 
1877) is the truth, then it will be clearly the fault of the legisla¬ 
ture and of the administration in charge ol the canals if, under all 
ordinary circumstances, there is another dollar sunk hereafter in that 
extraordinary sink which has before swallowed up so much, namely 
extraordinary expenditures . 

Canal debt and interest —The canal debt on the 30th of Septem¬ 
ber, 1877, less all balances in sinking funds, was $8,630,016 ; on 
which a present annual interest accrues of $593,622. 

Constitutional Obligations on the Canal Revenues — The consti¬ 
tution of the State of New York requires that from the annual sur 
plus revenues of the canals, there shall be paid into the sinking fund 
for the extinguishment of the canal debt the sum of $450,000 ; and 
for the support of the State government, the further sum annually 
of $200,000, or a present annual total of $650,000. Including 
also so much of the interest on the canal debt as the constitution re- 
, quires shall be paid from the surplus revenues of the canals in coin, 
the appropriation of surplus revenue of the canals annually required 
by the constitution was, for the fiscal year 1876-77, $1,227,210.84, 
with a similar impending charge on the canal revenues for the pres¬ 
ent fiscal year, 1877-78. But as the canals for the fiscal year 
1876-77, after providing from the receipts for their use, for the ex¬ 
penses of their administration and for all ordinary repairs , showed 
a net revenue or surplus of only $3,031.33, the measure of their 


13 


inability to meet their constitutional obligations for the past fiscal 
year, was $1,224,179.51; with the added certainty that for the 
future no different fiscal results can be anticipated. 

The Canal Provisions of the Constitution Abrogated by Nat¬ 
ural Laws. 

The provisions of the constitution of the State of New York in 
respect to the disposition of the surplus revenues of her canal sys¬ 
tem have, therefore, by a higher law, been abrogated ; for no con¬ 
stitution or human law can enforce impossibilities, or direct the use 
and disposition of a surplus revenue from the canals, when practi¬ 
cally no surplus revenue exists or is likely hereafter to be placed at 
the disposition of the State. For nothing, in the opinion of your com¬ 
mission, is more certain than that under no system of toll adjustment 
and canal management, suited to the times, can a revenue be 
expected from the canals that will more than suffice to maintain 
them in a good workable condition and defray the expenses of their 
administration. The people of the State of New York may, there¬ 
fore, here and now, accept the conclusion that any existing debt 
standing charged to the canals and any interest on account of the 
same will not be paid from the earnings or revenues of the canals, 
and must be paid from the proceeds of general taxation. And it is 
difficult to see according to what principles of reason or equity the 
canal system of New York as it now exists can be held responsible 
for any existing debt or burden of interest on account of the same. 
There is no dispute that the Erie canal proper has from the first 
day it was opened for the transportation of commodities to the 
present hour been a profitable investment for the State. There is no 
question that the receipts from the use of the Erie canal have reim¬ 
bursed to the State every dollar directly expended in its maintenance 
and construction, and have also more than supplied any deficiency 
of receipts arising out of the construction and maintenance of the 
Champlain and Oswego canals. And, as respects the general finan¬ 
cial results of the entire canal system, the governor of the State, in 
his message, January, 1877, pp. 5-6, after pointing out that the 
canal debt on the 30th of September, 1877, was $10,081,660, and 
the balances in the sinking funds of the State at the same date, 
applicable to all debts, was $14,191.,889, goes on to say : 

“It must be observed, however, that the amount in the General 
Fund Debt Sinking Fund cannot all be applied to the payment of 
that debt without leaving a large deficiency of means for paying 
the current expenses of the government. The full amount required 


14 


for the payment of the debt was contributed from the surplus rev 
enues of the canals, as directed by the constitution, the last contri¬ 
bution having been received in 1873. But, instead of being applied 
to that object, it was used to pay other appropriations made by the 
legislature, and not otherwise provided for, and has never been fully 
restored. The debt therefore remains uncanceled.” 

It is also pertinent to here ask attention to the remarks of the 
controller of the State and of the State engineer, in their respective 
reports for January, 1878, on the same topic : 

“ The constitution of the State,” says the controller, “ contem¬ 
plates that the sinking funds established to provide for the payment 
of the canal debt shall be derived from the surplus revenues of the 
canals. Owing to the general stagnation in business and the conse¬ 
quent competition for the carrying trade by railroads the canals 
cannot earn a surplus. The Erie canal has been successful, far 
beyond the expectations and hopes of its projectors. For a long 
time it had the entire monopoly of the carrying trade, and the pros¬ 
perity it gave to the sections of the State through which it ran 
created a demand for lateral canals. The cost of these laterals was 
made a charge upon the revenues of the Erie canal, which charge 
was only just so long as the Erie canal had a monopoly.” 

“ When the legislature gave to the railroads the right to carry 
freight without the payment of tolls, it destroyed the power of the 
canal to meet these charges. By this act, which transferred so 
much business from the canal to the railroads, it practically abro¬ 
gated the pledges of the constitution and made cheap transporta¬ 
tion the policy of the State. In addition to the rivalry thus made 
by the State against its own canals by which they were shorn 
of their earning capacity to the extent of millions of dollars, it also 
instituted expenditures and kept them in repair under the contract 
system.” 

“ Under this system the canals not only fell into such a state that 
navigation was very materially impeded, bnt they were robbed upon 
every hand J—Report of the Controller of the State of New York , 
Jan. 1878, p. 32. 

“ Had the sums,” says the State engineer, “which have, in past 
years, been wasted on unnecessary works or stolen, been applied to 
the legitimate expenses of the cairals, the debt would have long ago 
been paid, their banks and structures all placed in a permanent con¬ 
dition; and the possibility of even lower tolls than now estab¬ 
lished.”— Report State Engineer and Surveyor , Jan. 1878, p 34. 


15 


When the inevitable becomes manifest, there is nothing left but 
to accept it and practice resignation. But it is easier to pass into 
the state of full resignation, if it can be felt that what has become 
imperative through force of uncontrolled circumstances, is exactly 
what would have happened had the conclusion been wholly deter¬ 
mined on the basis of the principles of justice and expediency by 
those interested in the result. Such is the exact present relation 
of the people of the State of New York to any burden of obligation 
arising out of the existing canal debt and the necessity of paying 
interest thereon until the debt is discharged. The canals cannot 
pay this debt or this interest, for they neither have, nor are to 
have in the future, any surplus revenues over and above the cost of 
their administration and maintenance. The people, therefore, 
must discharge these obligation by taxes on their estates. But if 
the people had not allowed the revenues to be derived from their 
legitimate objects, and “ used to pay other appropriations,” or 
“ wasted on unnecessary works or stolen,” there would have been 
to-day no burden of canal debt or interest for the people to assume. 

A summary of results derived from this analysis of the various 
elements entering into the canal finances would, therefore, be as 
follows: 

There is, in the opinion of the State engineer, no necessity for 
any further canal expenditures*on account of extraordinary repairs. 

The principal and interest of any existing debt, charged to the 
canals, cannot be expected to be paid from the future resources of 
the canals. The same is true of the existing constitutional require¬ 
ment, that there shall be paid from the surplus revenues of the 
canals the sum of $200,000 per annum toward the support of the 
State government. 

New Work. —Enlargement, etc., opens up an independent ques¬ 
tion, the same in character as that presented when the canals were 
first projected, built and enlarged, which should be decided by the peo¬ 
ple of the State in the same way as any other business proposition 
which may be brought before them, i. e ., by determining whether 
the benefits to accrue from such expenditure are sufficient to war¬ 
rant or justify it. 

Prospective Future Receipts and Expenditures of the Canals. 

The next and the most important questions that come up for 
consideration in connection with this investigation are : 

What amount of (ordinary) annual expenditure must he in - 


16 


curved, and is essentials to administer the canals and maintain 
them in a good workable condition • and by what system and rates 
of tolls can the largest revenue be obtained by the State for the use 
of the canals without impairing their ability to successfully com¬ 
pete with other and rival methods for the transportation of mer¬ 
chandise ? The answer in general to the first of these questions is 
to be found in a provision of the State constitution; and to the 
second, in considerations of experience and expediency. 

The provision of the constitution referred to, is to the effect, that 
the expenditures on account of the canals for collection, superin¬ 
tendence, ordinary and extraordinary repairs, shall not in any one 
year exceed in amount the gross revenues of the previous year. 
So long, therefore, as this constitutional provision remains in force 
(and should the people of the State desire to change or abrogate it; 
or even as proposed, abolish all tolls and make the canals free, the 
amendments necessary to effect such object could not, at the earliest, 
become operative before January 1, 1881), the canals of New York 
must depend on their current revenues to meet the cost of their pres¬ 
ent administration and maintenance. For, as the Auditor of the 
Canals has clearly pointed out in his last report (January, 1878), there 
is from this constitutional provision “ no escape or practical method 
of circumvention and, furthermore, that it is not the revenues col¬ 
lected in any one year that are available for expenditures the suc¬ 
ceeding year; but “ every year’s expenditures for maintenance are 
necessarily paid from the earnings of the same fiscal year.” ( See 
letter of Auditor to the Speaker of the Assembly , January 17, 
1878.) 

Now for the last two fiscal years—1875-76 and 1876-77—the ex¬ 
penditures on account of the canals for administration and repairs 
have averaged $1,162,707.19 per annum ; and the Canal Auditor, 
upon carefully reviewing the whole subject, is of the opinion that a 
present annual expenditure of an equal amount, represents the 
minimum necessary to maintain the canals in good navigable con¬ 
dition, “ secure proper attendance at the locks, and protect and 
collect the revenue.” But for the fiscal year ending September 30, 
1877, the earnings of the canals fell short of providing for such an 
expenditure, by the sum of $109,346.18; and for the current fiscal 
year, 1877-78, and under the existing rates of toll, there is no good 
reason to expect that the revenue will be any greater than for the 
immediate previous year. And if by any contingency the revenues 
of the canals for the current year were to be increased to the 


17 


amount, essential in the opinion of the auditor for their maintenance 
—$1,162,707.19—such an amount, under the restrictions of the 
constitution, could not, it would seem, be lawfully expended because 
it exceeds the gross revenues of the canals for the fiscal year 1876- 
77 by the sum of $109,346.18. It probably never entered into the 
minds of those who drafted and proposed the constitutional amend¬ 
ment restricting the annual expenditures on the canals, or of the peo¬ 
ple who ratified it by their votes, that the time ever could come 
when the New York canals would fail to earn sufficient to defray 
the cost of their administration and maintenance; but the unex¬ 
pected (which it has been often remarked is the thing most likely 
to happen), now actually has happened; and confronts the canal 
board and the legislature of the State of New York, with a problem 
of the most serious character. 

Assuming (as we are warranted in so doing), that the earnings 
of the canals for the current fiscal year, under the existing rates of 
toll, are not likely to prove sufficient to yield the sum, which the 
State Auditor, reasoning from the experience of recent years, is of 
the opinion it is necessary to expend for canal maintenance, what 
is to be done ? The Auditor, himself, gives one answer, and the 
one that most readily suggests itself; namely, to forthwith “ impose 
such rates of toll as will surely produce a revenue sufficient at least, 
to keep the canals in good repair, with a safe margin for such con¬ 
tingencies, as breaks and necessary extraordinary repairs.” But 
this is evidently not a sufficient and satisfactory answer. “You 
may lead a horse to water but you cannot make him drink.” You 
may arbitrarily impose any system or rates of toll that you please; 
but if such rates are of such a character as will enable the railroads 
to underbid the canals in the smallest degree in the matter of 
freight, as surely as water seeks the lowest level, so surely will the 
business of transportation leave the canals and go to the railroads, 
and the canals instead of earning as much or more than they now 
do, will inevitably earn less. It is true that the legislature 
of New York under the recent decision of the United States 
Supreme Court (Chicago Elevator cases), has free and unrestrained 
powers to determine what rates of freight, the railroads of the State 
competing with the canals shall establish and collect. But the 
authority of the legislature of New York is limited to its territorial 
jurisdiction ; and to attempt to prescribe local railroad rates, which 
the competing lines of adjoining States exterior to the jurisdiction 
of New York would not conform to or recognize, would be to in- 


2 


18 


volve State railroads and State canals alike, in one common destruc¬ 
tion. 

yWhat is to be done in the case the canals during the current fis¬ 
cal year, or indeed during any future year while the restrictive pro¬ 
vision of the constitution is in force, fail to earn their current ex¬ 
penses? What, in case of the necessity for large and extraordinary 
expenditures contingent upon a break which is always liable to 
occur by reason of a freshet or some other non-anticipated and non- 
preventible agency, it is not for this commission to advise. But it 
is legitimate for them to point out, that it will not be wise for 
the canal board or the legislature to defer consideration and the 
making of provision for an emergency such as has been suggested 
until the presence of the emergency requires immediate action. 
Apart from this consideration, the immediate policy which the com¬ 
mission would advise in respect to the canals would be as follows : 

First. To make all haste to amend or repeal the provision of the 
State constitution which inflexibly limits the amount that can 
under any circumstances be expended in any one year on the canals. 
It does not seem probable that this provision could ever have been 
adopted, if the existing circumstances could have been anticipated 
at the time of its adoption. So long as it remains in force, the 
canals are liable to be closed, or at least seriously embarrassed, at 
any moment during the business season of the year for want of 
the necessary funds to operate or repair them ; thereby inevitably 
entailing losses on a business of transportation—that last year rep¬ 
resented a movement of over five millions of tons and a value of 
about one hundred and fifty millions of dollars—in comparison with 
which the deficiency in the annual canal revenues of one or two 
hundred thousand dollars would be comparatively insignificant. 
Bather than that such a contingency should occur after the full tide 
of the season’s work had been entered upon after contracts had been 
made, and after all the instrumentalities of movements had been 
placed in full equipment, it would seem to be better that the canals 
should not be opened at all. 

Second. To determine in advance of the opening of the canals 
for the season of 1878 what amount of revenue, under a system of 
tolls that /will allow of successful competition witli the railroads, is 
reasonably certain to be earned by the canals for the current fiscal 
year; and then further determine that no efforts shall be spared by 
those in authority and trust to make such earnings and the year’s 
expenditures fully correspond, trusting to the good fortune that 
intelligent supervision and foresight always go far to command, 


19 


that nothing extraordinary demanding unusual expenditure, will 
happen. 

Judging from experience, it would seem as if under a system of 
tolls, no higher than prevailed during the past season, and which 
in the main were satisfactory to the forwarding interests, a revenue 
of over eight hundred thousand at least might safely he anticipated 
from the canal earnings for the year. 

It is very true, as has already been pointed out, that the Canal 
Auditor, who with his associates are entitled to the highest credit 
for what they have accomplished in the way of economy in the 
canal administration during the years 1876 and 1877, is decided in 
his opinion that a considerably larger expenditure than eight hun¬ 
dred thousand dollars will be necessary to efficiently maintain and 
administer the canals for the present fiscal year. But it will not 
be discourteous to the Auditor to remind him that it is not easy to 
define the limits of the possible, especially in the presence and 
under the pressure of urgent necessity. Besides, the canals for the 
first time in their history will be placed during the present year 
under the supervision of one responsible head, in itself a guarantee 
of greater economy in management than has ever before been 
experienced. “ All experience,” says the Governor of the State in 
his recent message, u has shown that the navigation of the canals is 
not improved, but is actually damaged by large revenues, leading 
to wasteful, careless and corrupt expenditures. This is illustrated 
by the experience of the past season. The expenditures have been 
much lower than for many years previous, but in no one of them 
have the canals been in such complete order, and so free from 
breaks and interruptions to navigation. And yet the administra¬ 
tion, during 1877, has been under the old cumbersome and expen¬ 
sive system. It is the opinion of many well-informed men that by 
placing the administration under one responsible head who will 
adopt a new system, cutting off all abuses, the canals can he success¬ 
fully managed for one-half the expenses incurred during the past 
year. This expectation may be too sanguine and it will be impru¬ 
dent to act upon it before it has been tried, but I trust it may be 
very nearly realized. The extraordinary and gratifying results 
which have been reached in the State prisons by the faithful and 
efficient supervision of one responsible head, give reason to hope 
for similar results under like management of I he canals.” 

It is also a circumstance that it is well to bear in mind in this 
connection, that during the years when large expenditures were 
being constantly made on the canals, for so-called improvements or 


20 


extraordinary repairs, these very improvements or repairs consti¬ 
tuted very serious obstructions to navigation. 

By the adoption of the constitutional amendment in 1874, per¬ 
mission was given to the State authorities to sell or abandon all the 
canals owned by the State, except the Erie, the Champlain, the 
Oswego, and the Cayuga and Seneca. It would seem as if no 
further evidence could be needed ol the wisdom of this amendment, 
or the expediency of action in accordance with the spirit and intent 
of the permission it embodies, at the earliest possible moment and 
to the greatest practical extent, than to re-exhibit the recent fiscal 
results of the operation of such of the canals as it has been pro¬ 
posed to discontinue. 

Thus, for the fiscal year 1876, the earnings or revenues of these 
canals, which may also be taken as a measure of their business, were 
$32,567, and their cost (administration, ordinary and extraordinary 
repairs), $199,235. For the last fiscal year, 1877, their revenues 
were $40,530, and their total cost, $185,729.48. Could the con¬ 
stitutional canals be at once relieved from the further burden of the 
canals, which it is in the power of the legislature to discontinue, 
there could be little -doubt that the canal revenues of the current 
year would be sufficient to meet the Auditor’s estimates for the 
year’s fiscal requirements; while to continue, at the demand of 
purely local and sectional interests, and at this crisis to saddle the 
main canals with the cost of maintaining laterals, which years of 
costly experience have demonstrated the folly of ever building; 
which no private interests could afford to take as a gift on condition 
of keeping in repair; which a period of the prescription of almost 
nominal rates for their use has abundantly proved, that to the people 
of the districts they traverse, these canals are not of sufficient im¬ 
portance to warrant any considerable using, is in effect to assert the 
expediency of providing for the little, at the expense, if not paraly¬ 
sis, of an interest that intimately concerns the prosperty of the 
whole State. Governor Tilden, in his message of January, 1875, 
also calls attention to a circumstance, now more pertinent than 
ever, that the late Mr. Flagg, who was so long and so usefully con¬ 
nected with the finances and canals of the State, always asserted, 
“ That the four canals, (which the amended constitution retains) 
were all that were necessary to make the canal system of New York 
entirely complete.” 

It is also worth while in estimating to what extent the expendi 
tures for maintaining the canals can be reduced, to recur to the 


21 


testimony on this point, given by the State engineer in his annual 
report (made January, 1877), and reiterated with emphasis in his 
report submitted January, 1878. “ Ordinary repairs,” he says, 

“ are executed by the superintendents, who, although appointed by 
the Canal Board, act, as a rule, under the sole directions of the 
Canal Commissioners.” 

“ The State engineer having had occasion, while examining mat¬ 
ters referred to him by the Canal Board, to scrutinize the expendi¬ 
tures for ordinary repairs, has become convinced that these expendi¬ 
tures have, in many instances, been largely in excess of the sums 
which, with economical and judicious management, would have 
been sufficient for the maintenance of the canals.” 

And again he states that “ having had occasion to examine a large 
number of Superintendents’ returns, he is convinced that the State 
has suffered and continues to suffer great loss, in the purchase of 
tools and materials, on account of the high and extravagant prices 
allowed. There is now no general system controlling these pur¬ 
chases ; each superintendent trades independently with merchants 
of his own selection, and it often occurs that the prices allowed for 
precisely 'the same kind and quality of articles, on adjacent or neigh¬ 
boring sections, vary as much as fifty per centum.” 

The purchase of tools and materials should be controlled by a 
general system, providing that they shall be made by a single or 
central authority, and by contract with the lowest bidder, or in 
some way that will secure the lowest prices.” 

“ With the data at hand, there is no difficulty in making close 
estimates of the necessities of a season ; and there is no doubt that, 
by adopting such a system, from forty to fifty per centum could be 
saved to the State on the purchases as now made. The purchases 
by the Superintendents now annually amount to about $200,000 ; 
and have in previous years amounted to nearly $300,000. As these 
purchases are now generally made, the State pays not the lowest 
market price, but the prices asked by the local merchants. Annual 
contracts could be made for the delivery of articles along the line 
of the canal when and where wanted, and sufficient supplies for 
daily use and emergencies could be kept stored in the various State 
shops. Whatever system is pursued in making these purchases, 
great improvement is clearly necessary in this branch of canal 
management.” 

“Attention is also called to the manner of making repairs to the 
structures of the canals. It has often occurred that extensive 
repairs, requiring careful engineering supervision, have been carried 


22 


on without consultation with the engineer department. In order to 
secure safe, durable and cheap work, it should b q provided by law 
that no repairs to any structure on the canals shall be made with¬ 
out the supervision of an Engineer.” 

During the fiscal year 1876, the reduction on the cost of ordinary 
repairs (See Engineer’s Report, 1878, p. 8), amounted to $149,438. 
As compared with expenditures for similar purposes during the 
previous fiscal year, and during the last fiscal year, 1877, a 
further reduction under the same head was effected of $172,989. 
And the Engineer, in calling attention to these facts, expresses the 
opinion, that if reforms, of the character and in respect to the 
things he indicates, can now be instituted; that there is an oppor¬ 
tunity for the further saving of “ at least $150,000 ” per annum in 
the expenditures for canal repairs, over and above the great reduc¬ 
tions which were made in 1876 and 1877. Rut it was for the ac¬ 
complishment of this and other similar objects, that the office of 
Superintendent of Public Works has been created and a competent 
person appointed to fill it; and until it has been proved to the con¬ 
trary, there is no good reason to doubt, that all that has been 
anticipated from the measure will be realized, and that under the 
present incumbent, the further sum which the State Engineer 
declares can be saved in canal expenditures, and even more, will be 
saved. 

Canal Bridges. 

Again, no one can examine the detail of the expenditures on the 
canals without being struck with the amounts annually appropriated 
for the construction and repair of bridges. In very many cases the 
construction of the canal invaded no prior rights of free communi¬ 
cation between the territory which it traverses that were of any 
material value ; and any subsequent necessity for bridges—as, for 
example, where centers of population, more or less extensive, have 
subsequently come to exist along the line of the canals — has 
resulted, not by reason of any conditions originally created by the 
canals, but because t’ e increased value and use which the construc¬ 
tion of the canals gave to adjacent private property, created necessi¬ 
ties for the construction of bridges in order that the value and use 
of such private property might be further increased. In all equity, 
therefore, in all such cases, the population would seem bound to 
accommodate itself to the necessities of the canals, and not the canals 
to the necessities of a population, grouped under the name of a vil¬ 
lage, town or portion of a city, which would not probably exist at all 


23 


had not the canal been previously constructed. The Commissioner 
would therefore recommend, that except where contract or stipula¬ 
tion has been made to the contrary at the time of the original con¬ 
struction or enlargement of the canals, the several towns or cities 
traversed by the canals be hereafter required to construct and keep 
in repair the bridges crossing the canals, in the same manner as the 
same towns and cities are now required to construct and keep in re~ 
pair the bridges necessary or convenient for crossing the natural 
water courses, or ravines by which these territories may be inter¬ 
sected. 

In view of these facts and considerations, the Commission feel 
warranted in assuming, that an annual revenue of about eight 
hundred thousand dollars, or as much at least as has been derived 
from the use of the canals during the season of 1877, under the re¬ 
duced system of tolls, will suffice, especially under the new system 
of centralized superintendence, to keep the canals in a good work 
able condition—extraordinary contingencies excepted—and also pay 
the expenses of their administration. But whether they are or are 
not warranted in their assumption, this one fact has got to be steadily 
kept in view; that for the next three years, the measure of the 
amount that can be expended on the canals in any one year, is the 
gross revenue earned during the preceding year; and that under a 
system or rates of toll, warranted by expediency, such earnings will 
be limited some eight hundred or nine hundred thousand dollars. 
It is not, therefore, under the circumstances, a question whether the 
cloth shall be cut according to the pattern. It has got to be ! 

We are thus brought logically to the one immediate and import¬ 
ant question before this legislature of the State, the Canal Board 
and this Commission, namely, by what system, or rules of toll, shall 
such a revenue as the canals are able to yield and live in competi¬ 
tion with the railroads, be collected. But before proceeding to the 
discussion of this question, it is important to first obtain a clear 
idea of the service of the canals; what it has been • what it is; and 
what may be expected in the future. 

The Service of the Canals; Past, Present and Future. 

Concerning the immense service which the Erie canal has ren¬ 
dered to the State and the country, there can be no dispute. 
The original motive of its construction was undoubtedly in the 
main to supply the needs of the State ; but it soon became apparent 
that its mission was to be far more important. 


24 


At the time of its construction and for many years subsequently, 
it was practically the only avenue for transportation of freight be¬ 
tween all that extensive area of fertile territory bordering on or 
adjacent to the great lakes, and the eastern Atlantic States and sea¬ 
board. In fact, until about the year 1856, “almost all the surplus 
grain produced in the Western States was transported to Eastern 
markets by the lakes and^ the Erie canal, and to the Southern mar¬ 
kets by the Mississippi and its tributaries ; JSTew York being the 
almost sole distributing point at the East, and New Orleans at the 
South.” Without the Erie canal, the growth of all the States north 
of the Ohio and east of the Mississippi would have been greatly re¬ 
tarded. With an avenue, ready, cheap and convenient to the East¬ 
ern markets and seaboard, once opened to them by the construction 
of the canal, the growth of these same States in population and 
wealth was exceedingly rapid and as if magical; and this growth in 
turn as rapidly increased the volume of business of the canals. 

Thus, in 1836, of the total tonnage of property arriving at tide¬ 
water by way of the Erie canal , the State of New York furnished 
364,907 tons, and the Western States, in the aggregate, but 54,219 
tons. In 1846 the proportions were 600,440 tons, New York, and 
506,830 from the West; in 1856, 374,580, New York, and 1,212,- 
550, West; in 1866, 287,948, New York, and 2,235,716, West; 
and in 1876, 342,552, New York, and 1,402,768, West. 

The tonnage of agricultural produce arriving at tide-water by 
way of the Erie canal, in 1836, was 165,870, of which 117,-870 
tons were credited as the produce of N ew York, and only 48,000 
tons as coming from the entire west and Canada. But, from this 
time, the aggregate of this class of tonnage increased with great 
regularity and rapidity, until the year 1863, when the total became 
1,899,911 tons, with this very noticeable reversal of proportions; 
1,676,480 tons being credited for that year to the Western States 
and Canada, and only 133.431 as derived from New York. Since 
the year 1863, the movement of this description of tonnage on the 
canals to tide-water has declined ; but not to a very marked extent 
as to the products of the Western States until 1875 ; but so nota¬ 
bly in respect to agricultural tonnage the product of New York, 
that for the years 1875 and 1876, the latter has been comparatively 
almost nothing; the proportions for 1874 being 1,400,993 tons 
Western States and Canada, to 25,051 tons New York; 1875, 
1,130,156 west, to 3,466 New York; and in 1876, 875,079 west, to 
7,312 New York. In 1876 the aggregate tonnage of all agricul- 


25 


tural products arriving at tide-water, by all the canals, was 906,483, 
showing a decline in 13 years of over fifty per cent; and this in the 
face of an immense general increase in the movement of agricultural 
produce passing from the West to the Eastern States and sea-board - 
For the fiscal year 1876-77, the total movement of this class of ton¬ 
nage on the canals, under the influence of large crops and reduced 
tolls, at once increased from 1,067,497 tons, to 1,515,600 tons. 

Of the products of the forest—timber, staves, fire-wood, ashes, 
etc.—the tonnage which moved to tide-water by the Erie canal in 
1836, was returned at 214179 tons, of which 208,779 appears as 
the product of New York and 5,400 tons as the product of the 
West and Canada. This movement culminated in 1870, when the 
aggregate was 946,139 tons, of which 937,799 was apportioned as 
coming from the West, and only 18,340 as the product of New 
York. In 1876, the aggregate movement of this description of 
tonnage to tide-water, by the Erie canal, was reduced to 570,755 
tons; of which 76,760 tons was credited to the State of New York 
for its origin. Including the Champlain canal, the movement of 
forest products to tide-water, by all the canals, which was 473,663 
tons in 1836, culminated in 1870 with a movement of 1,465,517 
tons; from which figure it ran down to 890,725 tons in 1876. The 
total movement on all the canals of this description of tonnage, 
which was 1,175 313 tons in 1876, increased to 1,384,454 tons in 
1877. Of manufactures—spirits, pig and bar iron, salt, furniture, 
etc.-*-the aggregate movement to tide-water by the Erie canal in 
1836 was only 10,806 tons, of which 10,152 was returned as derived 
from the State of New York, and 654 tons from the West. This 
movement culminated in 1870, with a total tonnage of this descrip¬ 
tion arriving at tide-water, of 72,345, of which 68,722 was from 
New York, and 3,794 from the West. For 1876, the aggregate 
movement of this class of manufactures to tide-water by the Erie 
canal, was 17,510 tons; by all of the canals, 44,268 tons; of which 
151 tons was returned as from the West. 

Of merchandise—sugar, molasses, coflee, railroad iron, crockery, 
etc.,—the total movement going from tide water, by all the canals, 
in 1836, was 117,886 tons, of which 73,832 tons was left in the 
State, and 43,058 passed out of the State ; 38,893 tons going West. 
This movement culminated in 1853, when the aggregate of this 
description of tonnage going from tide-water by the Erie canal was 
396,684 tons ; and by all the canals, 426,404, of which 154,422 tons 
were left in the State, and 274,927 passed out of the State ; 231,- 
879 going west. For 1876, the aggregate movement of this class 


26 


of freight, by all the canals, from tide-water, was 48,542 ; of which 
28,769 tons were left in the State, and 19,723 passed out of the 
State; 6,063 tons west. 

The striking results of this analysis is the showing of how grad¬ 
ually the main object for which the canals were originally projected 
and constructed, namely: the supplying of the wants of the State, 
has ceased to be the object; and how small a proportion of the busi¬ 
ness of the canals now originates in the State of New York. 

A summary of the service performed by all the canals from 1837 
(the earliest date for which reliable figures seem accessible), to 1877, 
gives the following results : 

The total movement of property of all kinds on all the canals for 
the year 1837 was 1,171,296 tons, having an estimated and re¬ 
turned value of $55,809,000. From this time this business of 
transportation increased with great regularity. It was 2,869,810 
tons, having a value of $151,663,000 in 1847; 3,344,000 tons, with 
a value of $136,997,000 in 1857; and 5,688,000 tons, with a value 
of $278,966,000 in 1867. The movement of the canals attained its 
greatest proportions during the period from 1868 to 1874, inclusive ; 
in the respective years of which period the aggregate tonnage trans¬ 
ported and its returned value was as follows: 


Year. Tons. Value. 

1868 . 6,442,225 $305,301,000 

1869 . 5,859,080 249,281,000 

1870 . 6,173,769 231,836,000 

1871 . 6,467,880 238,767,000 

1872 . 6,673,370 220,913,000 

1873 . 6,364,782 191,715,000 

1874 . 5,804,588 196,674,000 


The largest amount of tolls collected in any one year for the use 
of the canals was in 1862, namely, $5,188,943, on a tonnage move¬ 
ment of 5,598,785. It was $4,246,000 in 1868; $3,072,(‘00 in 
1872; $2,637,000 in 1874; $1,340,000 in 1876, and $1,041,690 in 
1877 (fiscal year), a smaller amount than was collected in any one 
year since 1836. 

The largest number of boats, irrespective of tonnage, built and 
registered in any one year, was in 1847, namely, 1,446. The 
largest amount of new tonnage put on the canals in any one year 
was in 1862, namely, 142,470. After that the amount of new ton¬ 
nage put in the canals fluctuated greatly ; 28,795 in 1865 ; 80,360 
in 1867; 29,225 in 1871; 79,740 in 1873 ; 45,760 in 1874 ; 10,825 
in 1876. 









27 


Period of Greatest Usefulness of the Canals. 

From this analysis it appears that the period of greatest useful¬ 
ness of the New York canals, measured by the amount of property 
transported, was during the years from 1868 to 1874, inclusive, during 
which time there was no very marked change in the amount of 
business transacted. The year 1874, however, marks the inception 
of a period of decline, as will appear from the following table : 


Years. 

Tonnage 

movement. 

Tolls 
collected. 

No. of 
boats built. 

Movement of 
boats in miles. 

1873. 

6,364,782 

5,804,588 

4,859,858 

4,172,129 

$2,976,718 

2,637,071 

1,590,032 

1,340,004 

433 

9,485,450 

8,010,615 

1874. 

249 

1875. 

102 

6,621,175 

5,830,775 

1876. 

75 



The year 1876 was one unfavorable alike to railroads, as well as 
canals. The wheat crop of the country was below the average, and 
other crops were not notable for either quantity or quality. Busi¬ 
ness of every description was depressed and paralyzed—the result, 
remotely, of a tremendous war and enormous expenditures, and, 
proximately, of reaction from a period of almost unprecedented in¬ 
flation in the wages of labor and the prices of commodities. And 
yet, during this year the tonnage conveyed on the New York sys¬ 
tem of canals (4,172,129) was equivalent to more than one third of all 
the tonnage engagedin foreign trade which entered into all the ports 
of the United States during the same year (12,510,748), and nearly 
equal to the aggregate tonnage of all American and foreign vessels 
which entered the port of New York from all foreign countries dur¬ 
ing the same period, namely, 4,467,139. 

Effect of Railroad Competition on the Canals. 

But whatever may be the extent of the diminution of business 
experienced during recent years by the canals, there can be no 
doubt as to the principal cause of such diminution. It is due 
mainly, if not entirely, to the competition of the railroads. This 
competition showed itself first in the withdrawal from the canals 
of the passenger business. In 1837 the Erie canal was practically 
the only avenue for the transportation of passengers and mer- 
* chandise between the northwest and the eastern Atlantic States and 
sea-board. As late as 1848 the mileage of packet boats on the 
canals was 542,300 miles; in 1875 it was 2,725 miles. Then all 
those commodities requiring rapid transportation, “ express goods,” 













28 


were soon transferred from the canals to the railroads; and 
gradually, manufactured goods, and the large class of freights, 
known as “general merchandise,” ceased to form any considerable 
part of the canal traffic, and were in turn transferred to the rail¬ 
roads. Comparing the results of the canal business in 18G1 and in 
1873, we have the following results: 

The transportation of flour fell off from 2,012,574 barrels in 1864, 
to 751,870 barrels in 1866, and to 181,731 barrels in 1873, a decline 
of about 90 per cent. In 1876 but 81,019 barrels of flour were 
moved on all the New York canals. Wheat fell off from 33,171,900 
bushels in 1861, to 26,766,000 in 1873, and 13,879,000 in 1876. 
Butter, from 2,605 tons in 1861, to 590 tons in 1866, and 10 tons 
in 1873. Cheese, from 2,605 tons in 1861, to 426 tons in 1873. 
Dried fruit, from 1,810,000 lbs. in 1861, to 131,000 lbs. in 1873. 
Coffee, from 4,892,000 lbs. in 1861, to 142,000 lbs. in 1876. 

On the other hand, the 947,733 bushels of potatoes transported 
on the canals in 1861, increased to 1,356,000 bushels in 1873, and 
1,333,933 in 1876. Coal increased from 635,720 tons in 1862 to 
1,625,859 in 1873. Iron ore, 138,117 in 1862, was 415,968 in 
1873; and stone, lime and clay from 115,600 in 1862 to 415,000 in 
1873. Boards and scantling, 592,274 tons in 1861, were 1,300,000 
tons in 1873. 

After 1873 the depression in business affected the demand for so 
many articles, and railroad rates were so much reduced, that the 
specific movement of freights on the canals seemed to be governed 
by no rule; while the aggregate freight movement was constantly 
on the decline. Comparing the fiscal year of 1876 with that of 
1873, the decrease in canal tonnage was 2,192,553, and in revenue, 
$1,636,725. Comparing the fiscal year of 1876 with that of 1875, 
the decrease in canal tonnage was 687,729, and in revenue, 
$250,028. The results of the freight movement on the New York 
Central and Erie railways for 1876 as compared with 1875 showed 
on the contrary a gain for the season of 534,598 tons. 

The following table shows the amount of tonnage transported on 
the New York canals, and on the New York Central and Erie 
railroads, from 1873 to 1876 inclusive : 


29 


Year. 

Canals. 

N. Y. Central. 

Erie R R 

1873. 

6,364,782 Tons 
5,804,588 “ 

4,859,858 “ 

4,172,129 “ 

5,522,724 Tons 
6,114,678 “ 

6,001,954 “ 

6,803,680 “ 

6,312,702 Tons 
6,364,276 “ 

6,239,946 “ 

5,972,818 “ 

1874. 

1875. 

1876. 



For the year 1876 the total tonnage transported on the two rail¬ 
roads above mentioned was 12,776,498 ; the total tonnage moved 
on railroads and canals together, 16,948,627 tons. The canal, 
therefore, for the year 1876 moved 60.13 per cent as much as the 
New York Central railroad, and 69.8 as much as the Erie railroad, 
or 24.5 per cent of the business of the railroads and canals com¬ 
bined. The aggregate of the tonnage moved on the New York 
canals, New York Central, Erie, and Pennsylvania railroads for 
1876 was 28,872,338 tons; of this the New York canals moved 
4,172,129 tons, or less than one-sixth. 

In reasoning, now, about this marked change in the movement of 
freights from the canals to the railroads, which has occurred of late 
years, and has proved so disastrous to the canals, this point should 
not be lost sight of, and that is; that the change is not a special one, 
confined or restricted to the canals, but is general, affecting all 
w'ater-ways, rivers, the lakes, and the ocean coastwise, as well as 
the canals, and constituting a marked feature in the recent history 
of the entire internal commerce of the country. Thus, twenty 
years ago the commerce of St. Louis was almost exclusively con¬ 
fined to the Mississippi and its tributaries, and “the merchants of 
that city hardly regarded railroads as commercial highways.” But 
in 1875 only 22 per cent of the commerce of St. Louis was by 
river, and the remaining 78 per cent was by rail. 

An analysis of the movement of wheat, flour and corn from Chi¬ 
cago to the East since and including 1863, also gives the following 
results : In 1863, out of 10,736,000 bushels of wheat sent East 
from Chicago the railroads took but 89,861 bushels, or less than one 
per cent. In 1875, out of 22,017,000 bushels, the railroads con¬ 
veyed 5,956,000, and in 1876, out of 12,775,000 they took 5,378,000 
bushels. For the four years, 1873 to 1876 inclusive, when there 
were no unusual obstacles interfering with the commerce and use of 
the lakes, the increase of rail shipments was more rapid than in any 
former period. 

But this change in the methods of transportation under discus- 














30 


sion, exhibits itself more conspicuously when we confine the inquiry to 
an article like wheat flour in barrels, where the value of the thing 
is considerable, as compared with its weight, or bulk. Thus, out of 
a total of 1,519,000 barrels of flour shipped East from Chicago in 
1863, the railroads conveyed only 311,884 barrels ; but in 1876, out 
of a total movement of 2,545,121, the railroads took 2,309,580 ; or 
to state the case differently, it appears that while the shipments of 
flour from Chicago by the lakes during the year 1876 were only 
about one-sixth of the shipments by the same avenues in 1863, the 
movements of flour by rail East from Chicago in 1876, were about 
eight times greater than the movements of the same commodity by 
rail in 1863. 

In respect to corn — a commodity of lesser value — it appears 
that while there has been a very marked increase in the shipments 
by rail from Chicago, i. e ., from 25,000,000 bushels in 1863, to 45,- 
000,000 bushels in 1876, the shipments by lake have not exhibited 
any marked decrease; 24,749,000 bushels in 1873; 21,850,000 in 
1875, and 28,000,000 in 1876. 

Again, but a comparatively few years since, the principal part of 
the western grain consumed in the New England states, was 
brought by the canal and the Hudson river to New York city, and 
from thence distributed by means of vessels sailing coastwise, or by 
railroads to various points in New England. The bridging of the 
Hudson River at Albany, by which a direct rail-movement from the 
West to all points of New England was made easy, of itself, how¬ 
ever, created a revolution in the methods of western grain distribu¬ 
tion for New England, analogous, on a small scale, to the revolution 
in Indo-European commerce which occurred when the opening of 
the Suez canal in 1869-70, obviated the necessity for long voyages 
to India by sailing vessels via. the cape of Good Hope. Other 
agencies, as improved terminal railroad facilities, subsequently as¬ 
sisted in this work of changing the methods of grain supply and 
distribution for New England, the gradual course and present results 
of which are strikingly illustrated by the following table, presented 
in the report of the Massachusetts railroad commissioners for 1877; 


/ 


31 


Receipts of Flour and Grain at Boston from the West by 
Water and Rail from 1868 to 1877, inclusive. 


FLOUR, IN BARRELS. 



1868. 

1869. 

1870. 

1871. 

1872. 

1873. 

1874. 

1875. 

1876. 

1877. 


Barrels. 

Barrels. 

Barrels. 

Barrels. 

Barrels. 

Barrels. 

Barrels. 

Barrels. 

Barrels. 

Barrels. 

By rail. 

733,955 

818,827 

995,950 

1,052,042 

988,491 

1,282,429 

1,303,851 

1,230,137 

1,342,191 

1,463,492 

By water. 

701,727 

506,458 

658,714 

569,303 

493,258 

534,990 

502,021 

395,994 

293,066 

239,581 





CORN, 

BUSHELS. 





Bv rail..... 

483,875 

1,384,234 

1,370,421 

3,156,800 

5,119,749 

3,159,198 

2,768,382 

4,914,007 

7,933,644 

7,931,178 

By water. 

1,847,159 

1,055,676 

945,981 

481,303 

320,755 

304,867 

219,394 

148,277 

66,059 

88,767 


OATS, BUSHELS. 


By rail. 

606,033 

1,076,675 

1,676,108 

2,244,086 

2,384,699 

3,245,016 

2,885,812 

2,499,631 

2,718,574 

3,149,881 

By water. 

656,037 

338,756 

423,853 

179,807 

82,767 

35,732 

36,967 

196,089 

8,596 

20,092 


It appears from the foregoing table that the direct rail receipts of 
flour at Boston increased from 733,955 barrels in 1868 to 1,463,492 
barrels in 1877, and that the receipts by water fell from 701,727 
barrels in 1868 to 239,581 barrels in 1877- 

The change in the mode of transporting corn was even more 
marked. The direct rail receipts rose from 483,875 bushels in 1868 
to 7,931,178 bushels in 1877, while the receipts by water fell from 
1,847,159 bushels in 1868 to 66,059 bushels in 1876, increasing to 
88,767 in 1877. 

It is customary to say that this very curious and important diver¬ 
sion of transportation from the water-ways to the railroads—a 
change which a comparatively few years ago would have been re¬ 
garded as impossible to haveoccurred to any great extent—is due to the 
competition of railways. Analyzed, however, the expression means 
just this : that the railways have been able to do the work of trans¬ 
portation cheaper, by charging less directly as freight; or through 
improved facilities for loading and unloading, and by the avoid¬ 
ance of transfer charges from lake vessel to canal boat, and from 
canal boats to railroads for interior distribution, they have enabled 
the consumer to save sufficient to induce him to pay them higher 
freights than are charged directly on the lakes and canals, and still 
be the gainer in respect to his pocket. This is the plain, bald fact. 
It is a fact, moreover, against which it is no use for a community to 
contend, and any community that knows its own interest never will 
contend in the sense of attempting to resist the process of cheapen¬ 
ing. For he that will sell cheapest, quality being taken into consid¬ 
eration, takes the market. He that will transport freight cheapest 
is going in the future, as he has in the past, to take the transporta- 








































32 


tion. There may be and there has been interference by legislation 
to prevent dealers and freighters from charging too much ; there 
never will be any well-considered movement to prevent people from 
charging too little for permanently and voluntarily rendering ser¬ 
vice of any kind. The law of the survival of the fittest applies as 
well in the economic world as in the animal and vegetable kingdom; 
and the canals, if they are to live, have got to perform service as 
advantageously as the agencies against which they compete. If 
they cannot comply with this condition, they must either pass out 
of the sphere of competition, or be aided artifically and abnormally 
to accomplish what they cannot do naturally and normally. Whether 
the canals, under better management and lower and simpler rates of 
toll for their use, can be made self-supporting’ in the future ? or 
whether in order to enable them to continue to render the service 
for which they were constructed, their expenses for maintenance 
and administration must be defrayed, in all or in part, from the 
treasury of the State, which, in turn, has never any thing in it 
except what has been previously taken in the form of taxes from 
the people, are two separate and distinct questions. To aid, 
however, in the formation of an intelligent opinion in respect 
to the first question, it is desirable to pursue still further the 
analysis of the competition, under the influence of which the busi¬ 
ness of the canal has recently been interfered with and diminished, 
and learn, if possible, in what manner such competition has specifi¬ 
cally acted. 

And, in examining the comparative and average rates of toll, or 
freight charged for a series of years — i. e. % from 1870 to 1876, inclu¬ 
sive — by the railroads (New York Central and Erie) and the canal, 
respectively, for moving a ton of freight per mile, this fact first 
strikes attention, namely : that the canal always nominally performs 
its services at a very much smaller charge than is made by the rail¬ 
roads for performing a similar service. Thus, for example, service 
in moving freight was performed by the canal in 1870, 49 per cent 
cheaper than was performed by the railroads; 35 per cent cheaper 
in 1871; 36 per cent cheaper in 1872; 46^ per cent cheaper in- 
1875 ; and 37 per cent cheaper in 1876, the year of greatest depres¬ 
sion in the business and revenues of the canals. The evidence on 
which these statements are based will appear from the following 
table : 


33 


Years. 

Average frei’t 
by rail, per 
ton, per mile. 

Average frei’t 
and tolls by 
canal,per ton, 
per mile. 

Tons trans¬ 
ported by rail. 

Tons trans¬ 
ported by canal 

Comparative 
percentage. 
Cheapness of 
canals. 

1870 . 

1871 . 

1.61 cents. 
1.56 “ 

1.60 “ 

1.51 “ 

1.43 “ 

1.24 “ 

1.06 “ 

0.83 cents. 
1.02 “ 

1.02 “ 

0.88 “ 

0.73 “ 

0.66 “ 

0.68 “ 

1,667,950,495 

1,755,774,593 

1,971,617,787 

2,279,636,872 

2,438,980,945 

2,417,626,079 

2,711,878,976 

904,351,572 

1,050,104,125 

1,048,575,911 

1,057,711,089 

938,774,141 

727,597,369 

570,969,064 

49 per cent. 

35 

36 

42 “ 

49 “ 

46^ “ 

36 

1872. 

1873 .. 

1874. 

1875. 

1876. 


Reasoning from the basis of these figures, which are furnished by 
the Auditor of the State in his report for 1877, it would seem as 
though, making all due allowance for the saving in time and saving 
in expense, by reason of greater terminal facilities on the part of 
the railroads, that the railroads had more to fear from the competi¬ 
tion of the canals than the canals from the railroads. But when it 
comes down to a comparison of the respective charges for perform¬ 
ing a specific work for which the railroads and canals especially 
compete—as for the-carriage of a bushel of wheat or corn—the results 
are quite different. Thus, for example, the average freight charges 
for carrying a bushel of wheat or corn on the canals and Hudson 
river (including tolls), and on the New York Central and Erie rail¬ 
roads (from Buffalo to New York) for the year 1876, were as 
follows : 

.-W11 e at-\ ,-Corn-, 

per bushel of 60 lbs. per bushel of 56 lbs. 


c. m. cent. c. m. cent. 

Canal. 6 7 2 6 0 9 

Rail .. 6 7 1 6 1 3 


Of the above canal rates, 02.07 cents were the tolls on a bushel 
of wheat; and 01.93 the tolls on a bushel of corn from Buffalo to 
Troy, the head of tide water. 

It would not seem to be necessary to present any additional array 
of figures to make clear the position. For the year 1876, for ex¬ 
ample, the railroads (New York Central and Erie), bid against the 
canal and against each other for the movement of the great staple 
articles, from the tolls on the transportation of which, the canals 
have heretofore mainly derived their revenues; and the railroads 
did their work as respects the transportation of vegetable food, as 
cheaply or more cheaply, than the canals. For the year 1875, the 
average freight paid upon grain moved by rail from the West to 
the seaboard was returned at thirty cents per bushel, and for 1876, 
at twelve cents per bushel. The result was that out of an aggre¬ 
gate movement of vegetable food on the New York railroads and 
3 






























34 


canals for the year 1876, of 3,939,000 tons, the railroads took 
2,875,000 tons, and the canals 1,064,000; the railroads competing 
against each other for the grain movement East for that year, 
experiencing at the same time a loss of about $5,600,000 on their 
gross receipts as compared with their receipts for the previous year. 
The wonder is, that with nearly equal freight charges on the New 
York railroads and the canals for that year—to which the railroad 
added advantages in the great reduction of transit time, the 
canals should have done any business at all. 

But notwithstanding this most unfavorable exhibit so tar as figures 
and results are concerned, there is a per contra in favor of the canals, 
which is eminently worthy of attention. Thus in 1837, when the 
Erie canal was absolutely the only practical avenue for the trans¬ 
portation of commodities between the Northwest and the Eastern 
Atlantic States and seaboard, the total tonnage moved on the 
canal was 1,171,296 tons, with a returned value of $55,809,000. 
On the other hand, in 1876, with four great railroads as competi¬ 
tors for the service which this canal had once performed exclusively 
—the New York Central, Erie, Pennsylvania Central and Balti¬ 
more and Ohio—and all of them successfully diverting immense 
freights from the canals, the aggregate tonnage transported on the 
canals was 4,172,129 tons, or nearly four times as great as in 1837, 
and in value $113,090,372 or more than twice as much as in 1837. 

If the business of the canals has not increased in proportion to 
the increased experienced by the railroads, it must be remembered 
that a very large proportion of the business of the railroads has been 
created by the stimulus given to traffic by the new facilities which 
the railroads offered ; business in large proportion which it is not 
likely the canals would ever have obtained under any circumstances. 
And in illustration of this, attention is asked to the fact, that the 
business which the railroads at the outset most interfered with, was 
the transportation of passengers and merchandise on ordinary roads 
by horses; and to such an extent, that it was predicted that there 
must be a great reduction in the value of horses by reason of their 
certain considerable disuse. And yet the adjuncts of railway traffic 
which came in as soon as the railways were established, have been so 
great, that the use and value of horses in place of being diminished, 
have greatly increased. 

The year 1876, furthermore, was an exceptional year. It is ac¬ 
knowledged, that however it may be in the future, by reason ot 
future railroad improvements, the rates charged by the railroads in 
that year for the movement of the freight for which the canals 


35 


competed were ruinously unprofitable to the railroads. The annual 
report of the Baltimore and Ohio railroad covering the business of 
1876 states, that the freight rates were so low on certain classes of 
merchandise “ as to cause absolute lossesand that during a por¬ 
tion of the year this company actually declined to carry freights 
that were not only not remunerative, but which did not pay the 
actual expenses connected with the shipments. Yet, even under all 
these discouraging circumstances, the canals earned a sum for that 
year ($1,477,332 tolls), which all agree is now more than will prob¬ 
ably suffice ($1,162,707, Auditor’s estimate) to meet the necessary 
and ordinary expenditures for the current fiscal year. It will be, 
therefore, rash to assert that the New York canals, by reason of 
the swifter methods of railway transportation, have outlived their 
usefulness. So long as the bulk of eastern-bound freights to the 
seaboard consists mainly of grain, vegetables and lumber, and the 
western-bound freight is largely made up of coal, machinery, salt 
and other bulky commodities, the canal avenue, it would seem, must 
for many years to come remain a very important and serviceable 
highway for traffic. The change in recent years in the business 
that centers at St. Louis, from the water-ways to the rail, has been 
already pointed out; and yet, at the same time, it is the opinion of 
those in St. Louis most competent to form a judgment on this sub¬ 
ject, that while the bulk of the commerce of that city is now trans¬ 
acted by rail, the railroads, nevertheless, do not prove themselves 
able to CDmpete with the Mississippi river as a highway for the 
transportation of heavy and bulky freights, sueli as grain, hay, ores, 
tobacco, etc. 

Recent European Canal Experience. 

As bearing on the question whether the system of the transporta¬ 
tion of merchandise on canals has become obsolete, and is likely to 
be entirely superseded by the service of railways, a brief notice of 
the recent canal experience of Europe will be pertinent and in¬ 
teresting. 

Although the mainland area of Great Britain (84,392 square 
miles) is less than twice the area of the State of New York (45,658 
square miles, exclusive -of any share in the great lakes); and al¬ 
though railway service in Great Britain has been developed in 
proportion to area of territory to a far greater extent than in the 
United States (there having been one mile of railroad to every 5f 
square miles of territory in Great Britain in 1872, and one mile of 
railroad to every 8 6-10 square miles in New York in 1874-5); the 


36 


movement of commodities on the canals of Great Britain is at 
present reported as in excess of 23,000,000 tons per annum, and 
the length of inland navigable water-way, still nominally or par¬ 
tially open for traffic, at 4,138 miles. It is not to be denied, how¬ 
ever, that the canal system of Great Britain is not in a healthy or 
flourishing condition; but this is a result attributable almost 
entirely to the active hostility of the railway interest. At the 
outset the canal companies (all private and not national) endeavored 
to arrest the growth and development of the railways ; and, in 
turn, the policy of the railways, as soon as they came into corporate 
existence, was to impede and ruin the canals. “ The measures 
adopted for this end were of different kinds, but the policy was 
everywhere the same. In some cases the railway companies either 
bought or leased for long periods the navigable waters which ap¬ 
peared most likely to interfere with their monopoly. No less than 
1,716 miles of inland navigation, out of a total of 4,138, are at this 
time under the absolute control of railway companies.” 

Thus the London and Northwestern, and Lancashire and York¬ 
shire railway companies are understood to pay yearly to the Leeds 
and Liverpool canal about £40,000 ($200,000), on condition that 
the canal will maintain a certain maximum tariff on the transporta¬ 
tion of commodities. The formerly important route from London 
to Bristol has been substantially closed by the purchase by the 
Great Western railway of the Ken net and Avon canal ; while the 
purchase of the Birmingham, the Worcester and Birmingham, and 
the Stratford and Wolverhampton canals by competing railways 
have closed the line of water-carriage between Liverpool and Derby, 
Birmingham and Gloucester. By these and other purchases and 
combinations, the British railway companies have grasped the “ keys 
of the whole inland water-borne traffic” of Great Britain, control- 
ing, to a certain extent, even the famous Bridgewater canal, that 
early triumph of English engineering, which, in 1864, carried 
2,237,891 tons, at a mean price of a shilling (English ), per ton. 
“ It would be an affront now to common sense,” says a recent Eng¬ 
lish writer,* “ to maintain that so costly and combined efforts to 
close the gates of the inland navigation of this country” (Great 
Britain) “would have been made by the railway companies, had they 
not been aware that the canals were natural competitors for a por¬ 
tion of their traffic.” Attention may be also here called to the cir¬ 
cumstance, that on the Delaware and Raritan canal, of New Jersey 

* Our Inland Transportation. Frazer’s Magazine, April, 1877. 



the experience since it came under the control of the competing 
railways, has been similar to that of the English canals under simi¬ 
lar circumstances. The length of the Delaware and Raritan canal 
is 43 miles, and on it a toll-schedule ranging from 8 mills per ton 
per mile for fourth-class freight, comprising grain, lumber, etc., to 
2 cents and 8 mills per ton per mile for first-class freight, has been 
established. 

In Belgium, where the State has a direct interest and ownership 
in railroads, the canals are neglected and discouraged in order to 
concentrate the traffic upon the railways ; while at the same time, 
the State railways are acknowledged to be unprofitable, mainly by 
the reason of the low rates of freights officially established, and in¬ 
efficiency in State management, as compared with private manage¬ 
ment. In France, on the other hand, the system of canal transpor¬ 
tation finds favor ; the canals, in the transportation of heavy and 
bulky articles, successfully compete with the railroads ; and the 
business transacted upon them is reported as increasing. Review¬ 
ing the results of the operations of the French canals for the year 
1875, the ( Paris) Union Nationale says : 

“ Our internal navigation is still vital enough to effect a saving to 
trade of 56,000,000 francs. The canals and rivers transported during 
1875, 1,721,000,000 tons of goods at the small cost of 4,177,940 
francs. If these 1,721 millions of tons had gone by rail the charge 
would have been some 56,000,000 francs in addition.” 

In Germany, in place of abandonment, a large development of 
the system of canal transportation is actually in progress, or project¬ 
ed with a view of early undertaking and completion ; and a map 
has recently been published in Berlin by the veteran geographer, 
Petermann, showing that when the projected German canal system is 
completed, no part of Europe will possess facilities for cheap transpor¬ 
tation at all comparable with those of the German Empire. A society 
has also been recently formed in Berlin to promote and favor the 
construction of canals ; and among the new and important German 
canals in the actual process of construction are two, intended to 
establish closed water communication between Berlin, the capital, 
and the Baltic, and terminating respectively on the coasts of Meck- 
lenberg and Pomerania, and all this in face of the fact that Ger¬ 
many has at the present time a large and well-managed system of 
railway service, traversing the whole empire. Canal transportation 
is also being used, with increasing success, and under rates that 
defy competition, even in that land of low prices — India—the 


38 


entire cost of transporting merchandise upon the Madras canal 
being reported as not in excess of one-eighth of a penny per mile. 

As also bearing on the subject it is interesting to note that the 
English authorities, who assume to be conversant with the internal 
economic affairs of Russia, assert that one of the great mistakes 
recently made by the government of that country has been to 
attempt to supersede her large inland water-ways — canals and riv¬ 
ers — by the construction of parallel or competing railroads. The 
former have always paid, and still command the largest share of the 
transport of the domestic business — and especially of grain. The 
latter are mainly unprofitable ; the total net return of all the Rus¬ 
sian railways being estimated as not in excess of 2J on the capital 
actually invested in them. 

The Season of 1877 and the System of Low Tolls. 

With a view of guarding against future railroad competition, and 
in order to arrest what seemed to be, and actually was, a disastrous 
transferance of business from the canals to the railroads, the Canal 
Board in the spring of 1877, prior to the opening of navigation, and 
with the consent of the legislature, reduced the rate of tolls on the 
principal articles transported on the canals to the extent of fifty 
per cent or more, as per example : 


1876. 


1877. 


Wheat. 

1 mill per 1,000 lbs. per mile. 
1 “ “ “ “ “ “ 

Corn. 

Beans . 

IX “ “ “ “ “ “ 

1 “ “ “ “ “ “ 

Barley. 

Coal. 

X “ “ - “ “ “ “ 

X “ “ “ “ 1 ‘ “ 

3 mills per 1,000 ft. per mile. 

1 mill per 1,000 lbs. per mile. 

f*:: :: :: :: :: 

Iron ore. 

Lumber (white pine). 

Salt (domestic). 

(foreign). 

Potatoes. 

Stone. 

a “ .. 

Shingles. 


4 mill per 1,000 lbs. per mile 
4 ‘ 4 “ “ k ‘ “ 


-5 mill per 1,000 ft 


per mile. 


u min pvi xu. jjci ill lie. 

6 mill per 1,000 lbs. per mile, 
lo reduction. 


44 44 


Twenty-three articles, from which little or no revenue (tolls) was 
derived, were placed upon the free list All up freights, except 
foreign salt, were reduced fifty per cent. The largest abatement 
in any one single item of tolls was in respect to the toll levied upon 
boats used for canal transportation ; the revenue collected under 
this head for 1876 having been $116,791. For the years immedi¬ 
ately preceding 1876, the annual revenues from the same source 
were as follows : 1875, $132,497 ; 1874, 160,885 ; 1873, $189,000. 

It is curious to here note how little revenue accrued to the canals 

























39 


under the system of tolls in 1876 from certain articles, which, under 
the new arrangement of 1877, were placed on the free list. Thus, 
the total revenue accruing from the transportation on the canal in 
1876 of raw cotton, unmanufactured tobacco, hemp, clover and 
grass-seed, flax-seed and hops was but $262; and the sum total of 
all the tolls paid on all the articles in 1876, which were made free 
in 1877, was but $316. And when it is remembered that the 
same list of articles embraced such great staples as beef and pork, 
live animals, raw cotton, seeds, distilled spirits, lard, domestic cot¬ 
tons and woolens, leather, lead, hops, hemp and furs, it will be 
clearly perceived how completely certain descriptions of traftic had 
been driven from the canals. 

The results of the new policy (reduced tolls) for a single season’s 
experience thus exhibit themselves, comparing the fiscal years 1876 
and 1877: 


1876. 1877. 

Tolls.$1,477,331 1,041,690 

Tonnage. 4,172,129 5,246,925 


For the calendar years 1876 and 1877 the results were as follows : 


1876. 1877. 

Tolls.$1,340,003 $8S0,896 

For the calendar year, 1877, the commission has no exact figures 
respecting the increase of tonnage; but as whatever of increase took 
place occurred mainly during the calendar year. An increase of 
about 1,000,000 tons may be assumed. On such an assumption, the 
result of the new policy was in brief as follows: Loss in revenue, 
with a reduction in tolls of nearly 50 per cent, about 34 per cent; 
gain in tonnage, 20 per cent. 

If we analyze the several items which represent the increase of 
canal tonnage for 1877, under the new system, the mystery of the 
comparatively small falling off in revenue (considering the great 
reduction in tolls) at once reveals itself. In the first place, atten¬ 
tion should be particularly directed to the circumstance that 
during the fiscal year 1876, out of a total revenue from tolls levied 
on merchandise (tolls on boats and passengers excluded) of $1,223,- 
213, two classes of freight paid a toll for the use of the canals of 
$985,086, or over 80 per cent of the total amount received. These 
two classes were lumber and breadstuff, or, to adopt the canal 
designations, “products of wood'' and “ vegetable food” Now, 
had the falling off* in revenue from the tolls levied on the trans¬ 
portation of these two classes of commodities kept pace in 1877 





40 


with the reduction of tolls, the revenue from breadstuff's and lumber 
in 1877 would have been less than $500,000; but, instead, we have 
the gratifying fact that the actual revenue accruing from the move¬ 
ment of these two classes of products for 1877 was $703,927. 

The most remarkable increase in tonnage that has accompanied 
the reduction of tolls in 1877 was in the case of vegetable tood 
(breadstuffs), the actual tonnage being in 

1876 (fiscal year).1,064,293 Tons. 

1877 “ .1,502,544 “ 

Increase in 1877, 41 per cent. 

Comparing the movement of breadstuffs for the calendar years 
1876 and 1877, the results are even more favorable, and are specifically 
reported by the Canal Auditor to have been as follows: 

Tons of flour and grain carried in 1877. 1,412,317 

“ “ “ “ 1876. 966,405 

Gain in 1877. 455,912 

or 47 per cent. 

In respect to the products of the forest, the increased movement 
on the canals for the fiscal year 1877 over 1876 was as follows: 

1876 .’. 1,175,313 

1877 . 1,312,454 

Increase 11 per cent. 

The greatest absolute increase of tonnage moved in 1877 on the 
canals under the reduced toll system was, however, in the class of 
manufactures, comprising oil-cake, furniture, pig-iron, bloom and 
bar iron, castings, domestic and foreign salt. In 1876 the total move¬ 
ment on the canals of these commodities was returned at 180,201 
tons ; 'and in 1877, it rose to 480,513 tons, an increase of 165 per 
cent. The revenue from this source was, by reason of reduction of 
rates, but $27,295 in 1877, as compared with $39,731 received from 
the same sources in 1876. 

Another result afforded by the business of the canals for 1877? 
which is certainly very curious, is the very small tonnage movement 
— absolutely and comparatively — on the canals of the commodities 
which, under the new toll system, have been placed on the free list. 
The total quantity of commodities freed from toll carried in 1877 
on the canals was 26,088 tons ; which compared with the total 
movement for the year of 5,246,928 tons of freight paying tolls, 
was about one-half of one ■per cent. 










41 


Three items in the free list comprised more than one half of the 
total percentage, namely: 


Pork. 6,018 tons. 

Lard, tallow and lard oil. 5,089 “ 

Dried fruit. 3,223 u 


Total. 14,330 “ 


The total estimated value of all the products or commodities 
carried free from toll on the canals during 1877, was $10,488,073. 
But of this total value more than one-half was represented by one 
item, namely, that of domestic woolen goods valued at $5,672,312, 
and representing in weight 2,532 tons. The question which natur¬ 
ally suggests itself in considering this circumstance is: cannot so 
valuable a product and of such comparatively small bulk afford to 
pay a toll which would barely equal a small percentage of its 
value ? 

Domestic woolens, also now on the free list, were returned as 
representing a movement of 2,519 tons, and $1,100,320 in value. 

The total exports of grain by canal from Buffalo from the opening 
of navigation to December 1, 1877, were 48,425,968 bushels, as 
compared with 27,615,023 bushels shipped during the corresponding 
period in 1876 ; and 35,589,375 for 1875. 

The number of boats cleared at Buffalo during the season up to 
December 1, 1877, was 6,908, as compared with 4,850 in 1876; and 
in New York, 4,531 in 1877, against 2,319 in 1876. 

The gain in transportation on the lakes for 1877, it should be here 
noted, was greater than the gain in transportation on the canals. 
Finally, it further appears, that the rates in general, as established 
by the Canal Board in the spring of 1877, have proved satisfactory 
to the transporting or forwarding interests; and the year on the 
whole has been pronounced to be one of the most satisfactory to the 
boatmen in the history of the canals. The canal is reported to have 
been throughout the season in as good order as it ever was; and it 
lias been pointed out by the President of the Buffalo Board 
of Trade, and others, that the canals have been almost uniformly 
in their worst condition, and their navigation most expensive for 
boatmen when the tolls have been the highest, and the large rev¬ 
enues drawn from their corrupted administration. 

At the commencement of the season, canal freights for a time 
ruled very low ; 4 cents per bushel for corn and 4f cents for wheat 
from Buffalo to New York in the first week in June; while the 
6 









42 


average for the previous year, 1876, was 6.7 mills for wheat and 
6.09 tor corn. With even the present rate of tolls, one cent and 
on a bushel of wheat, and 9 mills y 6 -^ on corn from Buffalo to 
West Troy, such rates of freight could afford little or no margin 
of profit to the boatmen or forwarders. As the season advanced 
freights advanced, and for the first week in August were 6J per 
bushel for wheat and 5£ for corn, from Buffalo to New York; and 
with a return load of about 80 tons—the average for 1877, as 
against 44 tons in 1876 — which the boatmen, under the reduced 
tolls, generally obtained, the business became profitable. Later in 
the season freights still further advanced ; namely, to ten and twelve 
cents per bushel for wheat and eight to ten and a half cents per 
bushel'for corn, from Buffalo to New York; so that, notwithstand¬ 
ing the great reduction in the rates of toll, the cost to the shipper 
for transporting wheat from Chicago to New York by lake and 
canal has been higher the past season than before the reduction. 
“The average freight from Chicago to New York, including (the 
canal) toll, from September first to the close of navigation, was 
fourteen cents per bushel in 1877, and eleven cents in 1876.”— 
Report of Auditor , 1878. 

This very great advance in canal freights during the closing 
months of the season of 1877, and the large resulting gain to the 
boating and forwarding interests, was due mainly to the large wheat 
crop of the year, and a concurrent large foreign demand for it; 
which latter, for the time, more than exhausted the ability of the 
boats on the canal—reduced in numbers and quality by reason of 
the unprofitable business of previous years — to supply. 

As these circumstances— large crops, concurrent with large for¬ 
eign dema d — are not likely to immediately concur, they should be 
taken into proper consideration in estimating the result of continued 
low tolls on the business and profits of canal transportation for the 
immediate future; and modify any too sanguine expectations that 
might otherwise be indulged in. At the same time there would 
seem to be no doubt that the reduction of toll in 1877, as compared 
with 1876, did powerfully aid the canals in competing against the 
railroads for the transportation of grain during the past year and 
in determining the rates of freight, from the circumstance, that 
while in 1876, of the grain that came to New York, the railroad 
brought 61.54 per cent, and the canals 36.46 per cent; in 1877 the 
proportions representing this same movement are reported at 46 per¬ 
cent rail, and 54 per cent canal. As before pointed out, also, the 
total absolute gain, in the movement of vegetable food on the canals 


48 


for the season of 1877, as compared with the season of 1876, was 
438,251 tons, or 41 per cent. 

The change during the past year in the movement of pork and 
lard from the West to the East has been thus reported by Mr. 
Alonzo Richmond, President of the Buffalo Board of Trade. 

“ The rates of freight on these articles,” he says, “ by railroad 
from Chicago to New York, was nine dollars a ton ; and by pro¬ 
pellers and rail to New York, eight dollars a ton, before the tolls on 
the Erie canal were removed. Yet by a suicidal policy the tolls on 
these articles were kept so high that none of them were shipped by 
canal. The present rate of freight (August, 1867) by the railroads 
on pork and lard is seven dollars for all rail to New York, and six 
dollars if shipped by propeller and rail.” * 

“ The first shipments this season (1877) of pork and lard were 
made by propeller and steamboats on the Erie canal at four dol¬ 
lars per ton, and they went through in thirteen days, in as good, if 
not better order than if they had been sent by rail. Afterward 
shipments were made by propellors on the lakes and horse boats on 
the canal at three dollars a ton. Shipments have since been made 
by propeller on. the lakes and by horse boats on the canal at two 
dollars and fifty cents a ton from Chicago to New York, including 
all transfer charges.” 

It is also important to here especially ask attention to a circum¬ 
stance illustrative alike of the marked change for the better, which 
the events of the year brought to the boating interests on the 
canals; and also of the principle, that the best way of determining 
in taxation the influence or burden of any tax, is to ascertain and 
determine its relation to the profits accruing from the employment 
of the business or capital, on which the burden of the tax is pri¬ 
marily imposed; the tax invariably proving the greatest burden 
where the margin of profit is least. Thus, for example, the 
aggregate underwriters valuation of all the first, second and 
third class boats on the New York canals in 1871 (5,267 in all), 
was $9,076,700; for 1874 (5,837 boats), $7,881,700; and for 
July, 1877 (5,495 boats), only $4,921,200. 

Here, then, was a reduction in the valuation of the boating 
instrumentalities or capital employed on the New York canals of 
$4,155,500 in the six years from 1871 to 1877, or to the extent 
of nearly 50 per cent. In fact, the case might be presented even 
yet more forcibly; for, at the opening of the canal season in 1877, 
there was little or no demand for boats, and a commodity for which 
there is no demand, or prospective profit in owning or using, has 


44 


little or no market value ; and canal property at that time really had 
very little market value. The general result ot the season’s business 
on the canals was, however, to render the use of boats, which had 
before been wholly unprofitable, or attended with little profit, fairly 
profitable; which in turn, occasioned such a demand for boats, as 
to greatly increase their market value as instrumentalities for carry¬ 
ing on a remunerative business ; and this increase in valuation, or 
rather in the price which all the first, second and third class boats 
would sell for, over and above the prices attainable for the same 
in the spring of 1877, has been estimated for the Commission, as 
high as two millions of dollars; or nearly twice as much as the 
total revenue derived from the use of the canals tor the entire fiscal 
year of 1876-77. In estimating the beneficial results of the past 
year, the effect on the capital invested in canal work, as well as the 
increase in tonnage moved, should therefore be taken in account. 

It is the opinion of some, that this increase of business, and con¬ 
sequent increase in the value of boats and in opportunities for the 
profitable employment of a large amount of labor that might other¬ 
wise have remained idle, is due entirely to the reduction of tolls 
made in the spring of 1877. Such an assumption.is probably not 
fairly warranted; and yet there can be no doubt that the reduction 
of tolls was powerfully instrumental in producing the results cited. 
For if a point in the business of the canals had been reached (as it 
undoubtedly had), when receipts and expenditures for moving mer¬ 
chandise on the canals had attained a correspondence, or equilib¬ 
rium, the inevitable result must have been (what actually occurred), 
namely, a decrease in business, and general stagnation. But if (as 
is certain, in the case of some articles), the reduction of tolls caused 
the receipts for forwarding to exceed the expenses of forwarding to 
even a slight degree, the result would be (as has been), a revival of 
business, and the profitable employment of all the capital invested 
in transportation ; for if the margin of profit on specific transactions 
was small, it must be remembered, that small profits on very large 
transactions (such as the movement in the case under consideration, 
of over five million tons of merchandise), give results of the im¬ 
mense magnitude. 

The Future System and Bates of Toll. 

The necessity of the reduction of tolls effected by the Canal 
Board in 1877 having been demonstrated by the experience of the 
canals, alike before and since the reduction, and the wisdom of the 
policy adopted by the board in the Spring of 1877 having been 


45 


fully vindicated, the real question of moment—in comparison with 
which all that has been previously said is but rhetoric—now comes 
squarely up tor consideration ; namely, what shall be the rates of 
tolls on the canals for the immediate future, and in what manner 
shall they be levied and adjusted ? That, in view of past experience 
and the future contingencies of active railroad competition, it will 
not be expedient to re-enact a system of tolls higher than is at 
present established would seem to be demonstrated. It is not to 
be disguised, moreover, that the present year in the life of the 
canals covers a most critical period. The elements of the future 
are in a great measure unknown. The ellect of the constitutional 
provision, limiting inflexibly the amount of expenditure on the 
canals under every contingency, is yet to be determined. Those 
most conversant with the working of the canals widely disagree as 
to the sum that it will be necessary to expend during the current 
year under average and ordinary circumstances to keep them in 
good workable condition and collect the revenues. The business of 
the year is certain to be, in many respects, different from what it 
was during the last canal season. The crops of the United States 
are not likely to be as large, and with the discontinuance of war 
and the opening of the ports of the Black Sea, the foreign demand 
for American breadstuff's and provisions is likely to be less. The 
business of the country, as a whole, under the influence of con¬ 
tinued vicious economic laws and worse prospective' congressional 
legislation, may descend to lower depths of paralysis and unprofit¬ 
ableness than have yet been touched; and the railroads, the natural 
rivals and enemies of the canals, are likely to spare no effort to 
obtain the largest possible share of whatever of the transportation 
business the season may have to offer. Another matter having an 
important bearing on the future of the New York canals, is the 
enlargement of the Welland and St. Lawrence canals, now in 
progress and soon to be completed, and the prospective consequent 
increase of facilities, including cheapening of rates, for moving 
grain or breadstuff’s from the northwest by way of Montreal and 
the St. Lawrence to the ocean, rather than by the New York canals 
and the various east and west lines of the railways of the United 
States to New York or other American seaports. That the gov¬ 
ernment of the Dominion of Canada is of the opinion that the 
enlargement of the Dominion canals in question, accompanied by a 
deepening of the bed of the St. Lawrence in certain localities, will 
result in a large diversion of the grain movement of the northwest 
from its present routes, and in favor of the Montreal and St. Law- 


46 


rence routes to the ocean, is made evident by the large expenditures 
it is incurring for the purpose of effecting"] such improvements; 
$12,000,000 worth of work being reported as now under contract, 
with a contemplated further outlay at no remote future of some 
$17,000,000 additional. 

Whether these expectations of great commercial changes, to the 
detriment of the New York canals, and the citv of New York in 
particular, consequent upon the Canadian canal improvements, are 
likely to be fully realized, is an open question ; and the Commission 
find a wide difference of opinion in relation to it among those well 
qualified to judge, to whom they have applied for information.* 

In short, the results of the Canadian canal improvements, and 
how far these improvements are likely to be offset or compensated 
for by the reduction of tolls and expenditures on the New York 
canals, and the introduction of cheaper methods of boat propulsion 
or towage on the same, are matters that can only be determined by 
experience, and in the absence of such experience it is useless to 
now speculate. 

The attempt, under such circumstances, with so little actually 

* The following responses made to the Commissioners in answer to requests for 
information, strikingly illustrate the great difference of opinion touching the 
results of the enlargement of the Canadian canals, entertained by those conver¬ 
sant with the subject: 

An extensive lake vessel owner states in substance; that the time consumed in 
navigating the Welland canal, as well as risk of damage to vessel and locks, 
through the narrowness of the channel and other causes, will constitute insup¬ 
erable objections to its use by vessels of 50,000 to 60,000 bushels capacity ; that 
large vessels cannot be used profitably, as the cost of their construction is so 
great; that a sail vessel can only make five round trips from Chicago to Kingston 
during the season, instead of eight to Buffalo; that the large vessels now navi¬ 
gating the lakes cannot use the canal economically, as they are not adapted to the 
trade ; that,taking the relative cost of canal boat stock and lake vessel stock into 
consideration, it will be more profitable to use both classes via the Erie canal, as 
no commensurate advantage will be gained by adopting the St. Lawrence route. 

A prominent insurance man, well versed in all that relates to marine matters, 
gave the following answer to inquiries : “ Our lake vessels of the largest class, 
“with very few exceptions, will pass down. The Canadians are sharp, keen 
“ people ; ready to adapt themselves at once to any means promising to improve 
“their condition. They are staking almost everything on this vast improvement 
“ of the enlarged Welland canal. There will be no lack of investment of money 
“ to stock it to its utmost capacity, during the navigable months, with vessels and 
“ cargoes. The enlargement of that canal will open up a trade both ways that 
“ can but be very large, and will form a new era in the trade and commerce by 
“ that northern route.” 

A Western gentleman, holding an important commercial position, also writes 
thus : “ The great enterprise of our Canadian friends will, I think, be likely to 

“ divert a very considerable amount of foreign-bound produce through their chan- 




47 


known of new conditions from actual experience, and so much 
depending on the experience of the future, to determine what is the 
best immediate or near future policy for the New York canals, is 
not an easy matter. And there would seem to be but one path that 
can at present be safely and wisely followed; namely : to attempt 
to find out what is the highest basis of economic principle, and 
then base action as far as possible upon it and bide the result; con¬ 
fident that nothing but happy accidents can afford any better result. 

And, at the outset, in attempting to ascertain this basis, the Com¬ 
mission cannot refrain from expressing their astonishment at the 
method of assessing tolls on the canals, that always has been, and 
still is adopted. Even under the revised, reduced and much im¬ 
proved system adopted in the spring of 1877 and now in force, 
there are eleven discriminating rates of toll, exclusive of lumber or 
products of the forest ; and this latter class of commodities has nine 
different or discriminating tolls levied upon its movement. Thus, 
for example: 

Lumber No. 1, comprising white pine, basswood, etc., pays 


“ nets when the Welland canal shall be enlarged, so that our 'largest craft can 
“ pass through to Kingston. Already they make very low rates for such sliip- 
“ ments, and will be able to make them somewhat lower when they can use the 
“ larger vessels. * * * * From a statement I made last year of the 

“ relative cost of moving wheat from Chicago to Liverpool by several routes, it was 
‘ shown that even under the extremely low freight rates then prevailing on the 
“ Erie canal, the Canada route was no mean competitor. I think, with an en- 
“ larged Welland' canal, they would come close on to the rates that could be 
“ made via Buffalo and New York. I do not know any reason why in midsum. 
“ mer they ought not to have ocean freights as low from Montreal as from New 
“ York. If it be true that with that enlargement they can take grain as cheaply 
“ to Europe as the Erie canal can do, then the route will be an active competitor 
“ for that business, and the minimum of charges of every sort must be adopted to 
“ prevent a diversion from New York. I am also inclined to the opinion that with 
“ an enlarged Welland canal a very considerable portion of the New England sup- 
“ ply trade would go to, say Ogdensburgli, and then be distributed to points where 
“ needed. This would be a very considerable diversion from Buffalo, but perhaps 
“ not much from the Erie canal, as I suppose the most of this business goes by rail- 
“ road from Buffalo. * * * On the whole, I think, there will be found 

“ a very active competition between the two routes after the Welland shall be en- 
“ larged, and it will require not only the lowest possible schedule of tolls on the 
“ Erie, but also improved facilities and cheapened charges in New York, and a 
“ lower charge at Buffalo for elevating than has been current for the average of 
“ late years, to prevent a large diversion through Canada for foreign-bound sliip- 
“ ments and through the Welland to New England points. * * * The 

“ business must, in my judgment, be governed by the same rules of competition 
“ that apply to private enterprises; all unnecessary expenses must be cut off— 
‘‘ whether tolls, terminal and intermediate charges, or any thing else—all must be 
'* brought to the very lowest point.” 



48 


mills per 1,000 lbs. per mile. Ash, black walnut, beach, 
etc., mills per 1,000 lbs. per mile. Hemlock and spruce, T W 
milis per 1,000 lbs. per mile. Boards, planks, scantlings, railroad 
ties, pickets for fences, etc., 1£ mills per 1,000 feet per mile. Hem¬ 
lock and spruce, when not weighed, 1 mill per 1,000 feet per mile. 
Lumber transported in rafts, 1 cent 2£ mills per 1,000 teet per mile. 
Sawed stuff for window blinds, 2 mills per 1,000 lbs. per mile; and 
timber, squared and round, transported on boats, 5 mills and 3 
mills per 100 cubic feet respectively, according as it may happen to 
be, hemlock or not hemlock. 

Again, if a boat moving on the canals contains gas-pipes, glass¬ 
ware, grease, and handspikes, it would be subject to pay four 
different rates of toll; which in turn would necessitate the employ¬ 
ment of an inspector, a carefully drawn manifest, and more or less 
consumption of time. The gas-pipes would pay, per 1,000 lbs. per 
mile, 5 fractional mills; the grease, 1 mill and 5 fractions; the 
handspikes, 7£ fractions, and the glass-ware, 1 mill. 

If the boat contained iron in sheets, and articles manufactured 
from iron, the former would pay 1 mill, and the latter ^ mill per 
1,000 lbs. per mile, respectively. 

In fact, one can hardly resist the conclusion, as he studies the 
subject, that these discriminations were made originally to favor 
some individual or private interests, and have been continued ever 
since, to the detriment alike of the canal exchequer, the forwarder, 
and the consumer, because the precedents had long been in favor 
of their continuance, and it was easier to continue what was old 
than inaugurate something new. 

The present free list comprises twenty-live different articles. It 
has already been stated that the total amount of goods on the free 
list transported on the canals during the past season was only about 
one-half of one jper cent of the total movement for the same 
period. 

In view of these discriminations, the apparently simple question, 
u What is the Canal ?” becomes eminently worthy, at the present 
time, of careful consideration. Is it a highway toll-road, whereon 
every body who can control a boat is at liberty,by paying a stipulated 
and fixed toll, to employ his boat; or is the canal to be classed in 
the same category and come under the same rule as a railroad, 
which is, with few exceptions, used exclusively by the corporation 
which built it ? The question ought not to be a difficult one to 
answer and decide; yet as it is answered and decided, judgment 
will be given for or against the continuance of the long-sanctioned 


49 

and present discriminating canal toll system. Let us therefore 
reason about it a little. 

A railroad corporation is a common carrier, and holds the same 
relation to the community that the canal boat owner, who carries 
freight for a price—which, making allowance for the law of compe¬ 
tition, he is free to himself determine—holds to the public. Hence 
a railroad can properly discriminate in the rates it will charge for 
the transportation of different descriptions of merchandise. But the 
State, which built the canal and throws it open to the public, and 
furnishes nothing more than the water-road is in exactly the position 
of a State, county, town or corporation which builds a turnpike or 
a bridge. But who ever heard of the directors of a turnpike or of a 
bridge charging a different rate of toll on a wagon-load of handspikes 
and a wagon-load of grease; or a wagon-load of sheet iron, and a 
wagon-load of manufactures from sheet iron ? 

Is it not, therefore, apparent, that as long as discriminating tolls 
are levied by the State on similar kinds of freight, carried by canal 
boats on the State’s public water highway, no just and adequate re¬ 
sults are likely to be obtained? In short, such a system of collect¬ 
ing revenue must of necessity be prejudicial to revenue, by entail¬ 
ing complex and inquisitorial methods of collecting it, which by 
their cost and annoyance will more than counterbalance any gain 
that can accrue from discrimination; especially, when as in the 
present case, the maximum rate charged upon any transported com¬ 
modity is likely to be so small as to render any possible discrimina¬ 
tion a matter of very little absolute importance. Whatever of tax 
the State may levy and collect for the use of the canals has got to 
fall upon and be paid by the commodities transported on the canals . 
and the most simple system that can be devised to assess and collect 
the tax is likely to prove the most productive, the most economical, 
and the most equitable. 

To further aid in determining the correct principle according to 
which tolls should be levied for the use of the canals, attention is 
next asked to the following analysis of the business transacted on 
the canals during the fiscal year 1877, and from whicht he revenues 
of the canals were derived. 

Thus, out of a total tonnage of 5,273,013 tons transported on 
the canals during the last fiscal year (1876-77), the following three 
items, or classes of products contributed an aggregate of 4,103,551 
tons : 


7 


50 


Tons. 

Lumber and wood. 1,308,477 

Vegetable food, including flax, grass and clover seeds. 1,508,173 

Coal. 1,286,881 


Total. 4,103,551 


Leaving 1,169,462 to represent the tonnage movement of all other 
articles, or commodities. But if we analyze this 1,169,462 tons 
not comprised in the above-mentioned three classes or items of com¬ 
modities, we shall find that 904,749 tons were represented in 1877 
by the following additional few products: 


IUUS. 

Salt. 424,724 

Iron ore. 250,573 

Stone, lime and clay. 150,283 

Iron of all kinds. 79,169 


Total. 904,749 


Leaving only 254,713 tons—or less than 5 per cent of the total 
tonnage to represent the canal movement of all other articles 
known to commerce for the season under consideration. 

The lessson from these results is of the greatest importance, and 
is to this effect: Ninety-five per cent of the business of the ca¬ 
nals consists in the transportation of coarse, bulky and compara¬ 
tively cheap articles ; and the largest proportion of these are, in the 
broadest sense of the term, agricultural products. 

The main sources of revenue to the canals are from tolls on the 
transportation of two items or classes of commodities—lumber and 
vegetable food—and the entire’ system of tolls ought to be adjust¬ 
ed almost exclusively with a view of meeting the requirements of 
these two items or classes of commodities. Under the reduced sys¬ 
tem of tolls in force during the season of 1877, the movement of 
vegetable food on the canals increased 41 per cent, and the pro¬ 
ducts of the forest 11 per cent. If by further judicious adminis¬ 
tration and continued low, and further simplified tolls, the aggre¬ 
gate movement of vegetable food and forest products on the canals 
for the season of 1878 can be increased over the corresponding 
movement for the season of 1877, to the extent of only ten (10) per 
cent, the result will be a gain in tonnage more than eight times in 
excess of all the tonnage that the canals transported free from tolls 
during the fiscal year 1877. If the aggregate tonnage of vegetable 
food, lumber, coal, salt, iron ore, stone, lime and clay, and the pro- 

















51 


ducts of iron moved on the canals in 1877 can be increased ten per 
cent tor the season ot 1878, this increase will be nearly equivalent 
to the tonnage movement of all other commodities, of every name 
and nature, on the canals during the fiscal year 1877. 

The Three Methods of Collecting Revenue From the Busi¬ 
ness of the Canals. 

Practically, there would seem to be but three methods available 
for collecting revenue for the use of the canals ; and, in the order 
of their simplicity, they may be enumerated as follows: 

First.—A uniform toll or charge per boat per mile, moving east 
and west, respectively. 

Second.—A uniform rate per ton per mile on all products or 
commodities, moving east and vjest, respectively. 

Third.—A system of tolls, discriminating moderately in respect 
to certain products or commodities. 

Another system of tolls was proposed in the Constitutional Con¬ 
vention of 1867, by Hon. S. Townsend, a delegate, with a view of 
relieving “ greatly, in matters of details, the officers charged with 
the duty of the arrangement of the tolls and the custody of the 
(canal) money,” namely, a license system. The author, in a speech 
submitting this proposition, said that, in effect,it would be “saying 
to each boat at the beginning of the year : Here, take this license ; 
make your freight what you please, and take what you please.” 
See Proceedings and Debates, Constitutional Convention, 1867-68, 
p. 2037. As, however, a license system (as proposed), to be equit¬ 
able and, from a revenue point of view, reliable, must be based on 
the boat tonnage movement, or the tonnage of commodities annually 
moved, it would be, in fact, but a modification of the methods, Nos. 
1 and 2, above suggested. 

Assuming, then, that one of the three methods enumerated 
must be the system adopted, so long as an attempt is to be con¬ 
tinued to make the canals self-maintaining, consideration is next 
asked to the operation of systems Nos. 1 and 2, in detail, and the 
amount and the rate of toll or charge that would accrue under 
them, on the basis of the movement or business on the canals for 
the past fiscal year, 1877. 


52 


First. The Boat per Mile System. 

During the season of 1877, the mileage of boats engaged in 
transportation on the canals is reported by the Canal Auditor to 
have been as follows: 

Eastward bound. 3,458,655 miles. 

Westward bound. 3, 560, 960 miles. 

Assuming next, as a matter of expediency, that the tolls on boats 
proceeding westward from tide-water, should be fifty per cent less 
than boats proceeding eastward to tide-water, a rate of eighteen (18) 
cents per mile, per boat, irrespective of all contents of the boat on 
all eastward bound boats ; and fi/ve (5) cents per boat, per mile, on 
all westward bound boats, would, on the basis of the.canal business 
of 1877, yield a revenue of about $800,000. For example, and 
using round number: 

3,500,000 miles east, at 18 cents per mile, per boat, 

gives. $630, 000 

3,600,000 miles west, at 5 cents per mile, per boat, 
gives. 180, 000 

Total. $810,000 


The important point that next presents itself for consideration is : 
What burden will this boat per mile system, of tolling, impose on 
the average boat, in comparison with the burden entailed on the 
boat by the existing toll system, i. e., that of 1877? 

The entire distance to be traversed from Buffalo to tide-water, or 
the reverse, is 347 miles; which mileage at 18 cents toll per mile 
east, gives a charge or toll of $62.46 per boat, moving the whole 
distance; and at 5 cents per mile toll west , $17.35 per boat, also 
moving the whole distance. 

Now, the average rate of toll for eastern bound freight on the 
canals for 1877 was 1^ mills per ton per mile. If the average 
boat cargo is 200 tons (it was 197 tons for 1875, and 209 tons for 
1876), and is charged 1^ mills per ton per mile, the existing toll 
(estimated on the boat) on 347 miles would be $79.34 east, which 
is evidently a higher rate than is proposed by this scheme. On the 
other hand, the average toll as charged on western bound freight 
on the canals for 1877, was T 7 7 °o- mills per ton per mile; which 
assuming that the average western bound cargo is fifty tons, would 
make the existing toll (estimated on the boat) $12.15 per boat; or 










53 


with a cargo of 80 tons, the average for 1877, $19.43. There 
would be no difficulty, however, in apportioning the toll per boat, 
per mile, differently, if it was desired to differently apportion the 
charges on east and west freight movements; or to obtain a larger 
annual revenue than $810,000 from an equivalent of the canal 
traffic of 1877. Thus by increasing the toll or charge per boat per 
mile east to 20 cents, and allowing the toll of five cents per mile 


west to remain unchanged, the prospective revenue, adopting the 
mileage of 1877, would be as follows: 

3,500,000 miles east, at 20 cents per mile per boat.... $700,000 00 
3,600,000 miles west, at 5 cents. 180,000 00 

Total. $880,000 00 

Average toll per boat east. $69 40 

Average toll per boat west. 17 35 


This simple method of tolling will, therefore, easily bring (pro¬ 
vided the business is transacted) any definite amount of revenue 
that may be considered requisite or necessary to draw from the 
canals, with an avoidance of the use of weigh-locks (after the ton¬ 
nage of the boat has been once ascertained), and all necessity for 
the employment of inspectors and detailed manifests of the contents 
of boats or the several items of their cargoes. The rate of toll 
necessary to yield $880,000 per annum, assuming the amount of 
business transacted on the canals in 1877 to remain unchanged, 
would also be a less burden on well-loaded eastern-bound boats than 
the existing rate or toll on the same at present rates. Tolls on 
rafts of lumber, timber or bark might be assessed under Schedule 
No. 1, as proposed under Schedule No. 2. 

The Commission find, however, so strong objection to this 
simple boat toll as a means of collecting the canal revenues, mainly 
on the ground that the change is too radical, contrary to all 
precedents, and as affording an apparent advantage to newly-built 
boats possessing large capacity, and commanding, by reason of their 
quality, the highest rates of freight, that they have little expectation 
that it will find favor or be adopted. Theoretically it is the best 
plan ; and can any thing ever be practically wrong that is in truth 
theoretically right? In point of simplicity, and as placing the canal 
as near as possible in the position of a turnpike road—which is its 
true position—it would seem to be the best plan, and a brief ex¬ 
perience would undoubtedly demonstrate it to be such. 











54 


The fact that the average tonnage of boats on the Champlain canal 
is much less than on the Erie or Oswego canal (for the year 1877, 106 
for the former, in comparison with 214 for the two latter), need not 
militate against this system ; as in the case of an entire line of canal 
using boats constantly of a smaller capacity, the toll, per boat, could 
be proportioned in such a way as to make the average charge on all 
the canals uniform and equal. 

SECOND. THE UNIFORM RATE PER TON PER MILE SYSTEM. 

This system will, undoubtedly, commend itself to the majority of 
those interested in the canals as more practical, and as free from the 
objections which may be urged against the boat per mile system. 
The estimated results of the practical application of this system 
(No. 2), afford the following exhibit : 

For the fiscal year 1877, the total tonnage movement per mile 
east and west respectively, for 1877, was as follows: 

Tons moved one mile east. 679,281,764 tons. 

“ “ “ “ west. 178,078,797 “ 

The average toll per ton per mile moved east in 1877, was, as 
near as possible, lj^ mills; and the average toll per ton per mile 
moved west, was mills per ton per mile. 

A uniform rate of one (1) mill per ton per mile for all freight 
moved east, and one-half mill for all freight moved west, 

would on substantially the basis of the movement for 1877 give the 
followiug fiscal results, or revenue : 

East, 680,000,000 tons, one mile, at 1 mill. 680,000 

West, 180,000,000 “ “ “ “ ^ mills... 90,000 

Total. 770,000 

The rate per ton as here proposed, would be a reduction of ten 
per cent on the present tolls on all east bound freights (estimated 
from receipts of 1877), and 28£ per cent reduction of tolls on all 
Western bound freight. To obtain the above revenue, also pre¬ 
supposes the entire abolition of the free lists. But, with such a re¬ 
duction of rates, there ought not to be any free list or any valid 
claim preferred for the exemption of any article; with the possible 
exception of the article of coal. And the experience of the canals 
with this article for the two years 1876 and 1877 is worthy of at¬ 
tention. Thus, in 1876, with a toll of one mill per ton per mile, 
1,036,698 tons were moved, giving a revenue of $113,079. In 









55 


1877 with a toll of one-half mill per ton per mile, 1,286,881 tons 
were moved, giving a revenue of $85,504. 

One difficulty in the way of the adoption of this simple plan of 
a uniform toll per ton per mile, however, presents itself; not fatal, 
hut somewhat embarrassing; and to be regretted as possibly pre¬ 
cluding the attainment of complete toll uniformit} 7 . More than 
one-fourth of the revenue derived from the canals in 1877, namely, 
$241,546 out of a total of $880,896, was received from products of 
wood—-timber, lumber, etc., which were charged tolls in large pro 
portion by the 1,000 feet, and cubic feet, and not by the 1,000 pounds 
per mile. For example, the revenue collected on timber, lumber, 
etc., in 1877 was : 


Boards and scantling, per 1,000 feet.$195,883 

Shingles per M . . 5,679 

Timber per 100 cubic feet. 19,074 

Wood per cord. 5,737 


Total. $226,373 


Boards, scantling, etc., per 1,000 feet. $1,086 

Shingles per M . 21 

Timber per 100 cubic feet... 43 

Wood per cord. 253 


Total. $1,403 


In fact, staves appear to be practically the only products of wood 
which are now assessed and pay toll by weight per mile, and with 
the following results for the year 1877 : 


Staves, \ mill per 1,000 lbs. per mile. $13,490 

WEST. 

Staves, i mill per 1,000 lbs. per mile. 49 

Total.$13,539 


The reasons assigned for the assessment of tolls on lumber by the 
1,000 feet, rather than by the 1,000 pounds, or ton, per mile, are, 
that different varieties of lumber vary in weight; that all green 
]umber is much heavier than a corresponding quantity of dry lum- 




















56 


ber, and that it is not fair to discriminate adversely against those 
who may desire to transport their lumber to market in a green 
rather than in a dry condition ; or by reason of a lack of capital, 
may be unable to retain it in possession for a length of time suffi¬ 
cient to season it for market. 

On the other hand, the Commission are informed by those compe¬ 
tent to express an opinion, that, however much the above reasons 
for tiie enactment of discriminating tolls on lumber may have 
availed in the past, they are practically of very little importance at 
present; that nearly all the lumber at present transported on the 
canals is moved by large dealers, possessing ample capital ; that 
very little lumber in an unseasoned condition is now ever transport¬ 
ed on boats; and that, with the present low rates of toll, any dis¬ 
criminations on dry lumber by reason of differences in specific 
weights is of very little importance in comparison with the advant¬ 
age of having the tolls, as nearly as possible, uniform and simple. 

If these latter representations are correct, and the Commission 
are inclined to think that they are, then the true course to be taken 
in arranging the system of canal tolls, is to assimilate, or class lum¬ 
ber of every description transported in boats — except wood for 
fuel — with other merchandise, and impose on it a corresponding 
toll of \ mill per 1,000 pounds, or one (1) miil per ton moving east. 
As practically no lumber moves west on the canals, the uniform toll 
rates on western-bound freights which have been recommended un¬ 
der this system, may remain unchanged. 

If, however, it should seem desirable to the Canal Board to permit 
lumber moved on boats to be assessed by measurement as well as by 
weight , the corresponding tolls—assuming 1,000 feet of dry lumber 
to be equivalent to 3,000 pounds — vrould 1% mills to % mill; so 
that the toll schedule would read: 

On lumber of all descriptions — other than wood for fuel — 
transported in boats by weight, \ mill per 1,000 pounds per mile. 

On lumber of all descriptions — other than wood for fuel — 
transported in boats, by measurement, 1-J mill per 1,000 feet per 
mile. 

These rates are a reduction of one-third on the present tolls on 
some descriptions of lumber transported in boats — white-pine, 
white-wood, bass-wood, cedar, boards, planks, scantlings — or from 
7% fractions of a mill to 5 fractions per thousand pounds per mile. 
But can any good reason be assigned why lumber as a commodity 
should be subjected to any greater, or any less toll than pig-iron, 


57 


corn, ores, furniture, clay, sand, etc. ? The rates on oak, hickory, 
beach, sycamore, black-walnut, butternut, maple, ash, elm, fir and 
staves, under the proposed modifications, would remain the same as 
at present, when transported by weight. The rates on hemlock and 
spruce now 3^- fractions of a mill per 1,000 lbs. per mile would be 
advanced to J mill, per 1,000 lbs. per mile transported in boats. 

On wood, for fuel, the Commission would recommend a toll of 
one half mill (0.5) per cord per mile, transported in boats ; — present 
rate 0.4, an advance of one-tenth of a mill. 

On wood, for fuel, carried on rafts two ( 2) cents per cord, per 
mile (present rate). 

On tan-bark, carried in boats, one-half mill (■£) per cord, per 
mile. 

On tan-bark, carried in rafts, two (2) cents per cord, per mile. 

On timber, in rafts, one cent per mile, per 100 cubic feet. 

If the movement of lumber, timber, etc., on the canals remains 
the same in 1878 as it was in 1877—no increase or decrease—the 
revenue in prospective, from the transportation of these classes of 
commodities will be materially changed. But, judging from the 
experience under the reduction of the tolls in 1877, it is not 
unreasonable to expect, that under the more simple system of levy¬ 
ing tolls on lumber here submitted, the tonnage movement of lumber 
and the revenue from the same, will continue to increase. 

The timber and lumber tonnage constituted in 1877 about 36 per 
cent of all the east bound freight on the canals, and only 1J per 
cent of all the west bound freight. 

Steam yachts, and passenger boats, forming exceptions to all 
present business or movement on the canals, may properly be treated 
arbitrarily under any system of tolls, and continued to be subjected 
to existing, or any other rates, that may be deemed expedient. 

Recapitulating in brief, the above facts, reasonings and deductions, 
the main points of Scheme No. 2, as modified to meet the conditions 
of the lumber and timber transport are as follows :— 

Uniform rates for all commodities, other than lumber , moving 
east and west respectively . Restricting the assessment of lumber 
transported on boats to the 1,000 lbs. per mile system, and forbid¬ 
ding further assessments of lumber transported on boats by this 
1,000'feet per mile system, a restriction which the Commission believe 
will not be attended with any disadvantages to the lumber traffic, the 
uniformity of this toll system would be complete, except in respect 
to the movement of wood for fuel on boats, and the movement of 
8 


58 


timber, wood for fuel and tan-bark in the form of rafts. The rates 
of toll under Scheme No. 2, for western bound freight, furthermore? 
would be one-half the rates charged on eastern bound freight. 

It would be possible to still further simplify Scheme No. 2, by 
imposing all the tolls on freights moving east, and entirely exempt" 
ing from toll, all freight moving west. All tolls assessed for the 
use of the canals fall on the articles or commodities transported on 
the canals. This is an economic axiom. It is a further axiom, that 
the more simple the system for the assessment of taxes of any kind 
that can be adopted, the more perfectly the taxes will diffuse 
themselves ; the lighter the burden, and the maximum of economy 
in collection. A weight of fifty pounds fairly strapped on the back 
of an average man, constitutes no onerous burden ; but hung 
round the neck, or suspended from the fingers, its carriage for any 
distance would be impossible. In levying the tolls in part on east¬ 
ern bound freight, and in part on western bound freight, the State in 
a measure undertakes to say how the tolls shall be distributed. In 
levying them all on eastern bound freight and exempting all west¬ 
ern bound freight, the State practically leaves the boat owner, or 
forwarder to distribute them on the different movements and the dif- * 
ferent articles transported, as he may deem it expedient. 

As before stated, the adoption of Scheme No. 2 and the pro¬ 
posed rates, would constitute a marked reduction of the existing 
tolls—approximately to the extent of 10 per cent on eastern bound 
freight, and 28 per cent on western bound freight. But taking into 
consideration the economy and simplicity of administration which 
the adoption of this scheme would entail, the commission feel san¬ 
guine that if the business of the canals is dependent on the degree 
ot‘ tolls to be levied for their use; on the manner of assessing the 
tolls, and on the ability of the canals to compete with the railroads ; 
the proposed uniform and reduced rules, will not only yield the rev¬ 
enue as above estimated, but will so augment the traffic, that an 
annual revenue of from $810,000 to $850,000 can be safely relied 
on. 

If it is desired to effectually guard against any reduction of reve¬ 
nue below the amount realized during the season of 1877, it can be 
readily accomplished—supposing the business of 1878 to be the same 
as in 1877—by slightly advancing the uniform rates, as proposed by 
the commission, so as to make them correspond with the average 
tolls assessed during the year 1877—1 1-10 mills on eastern bound 
freight, and 70-100ths mills on western bound freights. 

Under the existing toll rates, all vegetable food moving east —ex- 


59 


cept bran, apples and potatoes—are now charged 1-2 mill per 1,000 
lbs. per mile; the articles excepted being subject to a toll of one (1) 
mill per 1,000 lbs. per mile; under the proposed new and uniform 
rate, the tolls on bran, apples and potatoes moving east, would 
therefore, be reduced one-half. 

FREE COMMODITIES. 

In the future administration of the canals one of two principles 
ought to be adopted and strictly adhered to. They should either be 
managed with a view of obtaining from their use, the largest rev¬ 
enue consistent with the fulfillment of their largest sphere of use¬ 
fulness, or at least with a view of making them self-supporting ; or 
for considerations of the general good, they should be entirely sup¬ 
ported by the State, and their use made free to all who may desire 
to use them. The former has been and is now the policy of the 
State. It has, furthermore, got to be the policy recognized for some 
years, or until the existing constitutional provisions in respect to the 
canals, can be repealed, or amended. And until the canals are 
made free, the burdens and the exemptions, the taxes and the priv¬ 
ileges, should to the greatest possible extent be apportioned with 
the utmost possible equality. To exempt, under existing circum¬ 
stances, any commodity which is able to pay toll from its payment 
for its use of the canals, is to arbitrarily increase the burden im¬ 
posed on all non-exempted products, or on the State treasury and 
the people ; and the representatives of the great staple articles 
which pass over the canals and which, unless the canals are made 
entirely free, have got to be taxed or tolled, in assenting to any 
such exemptions are discriminating against their own interests. 
Clearly there can be no valid plea for the putting of any article on 
the canal free list, unless it be shown that the subjection of the 
same to tolls will seriously impair its transport on the canals, or 
give to the railroads an undue advantage in competing for its carriage. 
But under the proposed new system of uniform tolls the rates are 
so low that the commissioners (at least in part), doubt whether a 
valid claim for toll exemption or discrimination can be prefered for 
any article or product likely to pass over the canals in any quantity 
that will make it worth while to make a discriminating exception. 
In judging of the correctness of this opinion, the circumstance 
already noted should not be lost sight of, namely : that the free 
goods transported on the canals in 1877 constituted only about one- 
half of one per cent of the aggregate movement. Thus the total 


60 


tonnage, east and west, paying toll in 1877, was 5,246,925 tons ; 
total free goods, 26,088 tons. 

But let us analyze this free list a little further. Of the 26,088 
tons carried free from tolls on the canals in 1877, 11,124 tons were 
pork, lard and lard oil, and beef (of the latter 17 tons). Now, 
under the proposed new and uniform rate, of one (1) mill per mile 
per ton, moving east, an entire ton of pork, or six barrels, would 
be chargeable with a toll of 34.7 cents ; or at the rate of about 5J 
cents per barrel. There were 5,031 tons of lard and lard oil moved 
over the canals in 1877, the returned value of which was $857,- 
734. Had a toll of one mill per mile per ton been levied on this 
quantity, and the same had been carried the whole length of the 
canal, the total charge (5,031 tons X 347 miles = 186,457 tons one 
mile), would have been $186.45, or about one-seventh of one mill 
per cent of the value of the commodities in question. The rate of 
freight by railroad on pork and lard, in August, 1877, from Chi¬ 
cago to New York, was $7 (all rail); and six dollars if shipped by 
propeller and rail. At the commencement of the season, ship¬ 
ments of pork and lard were made from Chicago to New York by 
propellers on the lakes and by horse-boats on the canal at three dollars 
per ton ; and subsequently for two dollars and fifty cents per ton, 
including all transfer charges. 

It is veiy true that so long as the great staple articles— the grain, 
the products of the forest, the salt, coal, iron-ore, stone, lime and 
clay — which furnish the great bulk of the business of the canals, 
are looked to for revenue, a free list of the character existing, and 
even with the additions recently proposed, is, from a direct revenue 
standpoint, a matter of little importance ; but, when the confusion 
that the engrafting of such a free list on a uniform rate per ton 
per mile system would inevitably entail, is considered; and also that 
such a list would compel the maintenance of an expensive clerical 
and supervisory corps that might otherwise be dispensed with, its 
further recognition and continuance becomes a matter of great 
importance and inconvenience. Every complication of rates in any 
system of taxation tends to corruption. Every simplification, on the 
other hand, is the surest guarantee against corruption and in favor of 
economy. A simpler system can be easier supervised and controlled ; 
a complex system is difficult to control, and expensive to supervise. 

Eor instance, suppose a boat, freighted with commodities weighing 
200 tons in the aggregate, to clear from Buffalo for New York, or 
tide-water. Under a uniform rate of one (1) mill, per ton, per mile, 
there would be no necessity for any manifests or inspection of cargo 


61 


but the boat would simply have to be weighed, and the toll per ton¬ 
nage assessed. On the other hand, under the present system, which 
comprises eleven different and discriminating rates on commodities, 
other than lumber, and nine different rates on lumber, with a free 
list ot of twenty-five separate and wholly incongruous articles in 
addition, no possible complete control and exactness in the assessment 
and collection of revenue is attainable, and none ought to be expected. 
If a boat, for example, carries ten tons of gas-pipe, and twenty tons 
of grease, the temptation is strong to reverse the items in any man¬ 
ifest, because the grease pays three times the toll of the gas-pipes. 
It is the characteristic of every system of taxation in operation in 
the United States—tariff, internal-revenue, State, town, city and 
canal—that it creates these temptations, and by arbitrary assess¬ 
ments, or administration, gives rise to a feeling on the part of the 
tax payer, that he has not been treated with equity; and yet pulpit, 
the press and the people wonder and deplore that the standard of 
public and private morality is not higher! A good place to begin 
reform is when opportunity presents; and the opportunity in 
respect to canal tolls is now presented ; and a uniform rate of toll, 
as proposed, while simplifying the collection of the canal revenues, 
would at the same time be in itself a certain guarantee of an honest 
collection of such revenues. 

THIRD—THE SYSTEM OF DISCRIMINATING TOLLS AND A FREE LIST. 

If, however, in the opinion of the Canal Board and the legislature 
no radical change with a view of simplifying the system of levying 
and collecting tolls on the canals, is expedient or desirable; and 
Schemes Nos. 1 and 2 as above presented are not to be considered, 
there is no other alternative (if revenue for the use of the canals is 
to be sought for), but to maintain substantially the present system, 
with the rates as established in the spring of 1877. But this sys¬ 
tem without abandoning the principle of discrimination and excep¬ 
tions on which it is based can in the opinion of the Commission be 
greatly improved and simplified by sweeping away the present long 
and complicated schedule of specific tolls on a large number of 
specifically enumerated articles, or products, and substituting a re¬ 
classification of products and consolidation of existing rates. Such 
a reclassification and consolidation based on no other principle than 
what is claimed to be present expediency, and representing the 
views of some of the most prominent and intelligent representatives 
of the canal forwarding interests, is accordingly here submitted, 
as system No. 3. 


62 


Productions of the forest, per 1,000 lbs. per mile... J mill 

Vegetable food. £ mill 

Merchandise, manufactures and all other articles or 

products not otherwise enumerated or specified. £ mill 

Timber in rafts per 100 cubic feet per mile. 1 cent 

Steam yachts and passengers, per mile.10 cents 

On Ashes, pot and pearl, Bricks, Brimstone, Bones, Coal 
Cement, Clay, Earth, Gypsum, Ice, Iron and all other ores, Pig 
Iron, Railroad Iron, Manure, Marl, Marble, Plaster, Pitch, Rosin, 
Sand, Salt, Steel, Spikes, Stone, Sugar, Soda-ash, Tar, Tin-plate, 
Tan-bark and Wood for fuel, and Leached Ashes, per 1,000 lbs. per 
mile, one-fourth mill. 


FRKE LIST. 

Boats, Beef, Bacon, Bleaching Powders, Coffee, Cotton, Corn 
Meal, Crockery and Glass Ware, Domestic Distilled Spirits, 
Domestic Cotton, Domestic Woolens, Dried Fruit, Dry Hides, 
Fish, Flour, Hemp, Hops, Iron Pipe, Lard, Lead, Leather, Molasses, 
Oils , Pork, Prints, Rice, Stoves, Stove Castings and Stove Fur¬ 
niture, Tallow, Tobacco, Wool, Live Cattle, Horses, Hogs and 
Sheep. 

In the schedule as above presented, no provision is made (and 
inferentially no permission is granted) for the movement of any 
commodity in the form of rafts on the canals, except timber. 

The rates, or .tolls, on freights moving east and west, respect¬ 
ively, are the same. 

The free list, as at present existing, has also been materially 
changed and enlarged. 

Under this system, and with the traffic remaining the same, the 
revenue derived from the use of the canals will not be materially 
different from what it would be if the existing rates of toll are re¬ 
tained unchanged. 


TOLLS ON FOREIGN SALT. 

Under the present system of tolls, all westward or upward bound 
freight on the canals pays one-half the rates imposed on the same 
articles moving eastward, with the exception of foreign salt. Such 
a discrimination in respect to this single product is in effect equiva¬ 
lent to the State saying to the representatives of the boating or 
forwarding interest ; we propose to arrange the system of tolls on 
the canals in such a way as to enable you to compete to the greatest 
extent and to the best advantage with your formidable rivals, the 





63 


railroads, except in respect to one single article. On that we offer 
a premium, in the form of a higher toll than is imposed on any 
other similar product transported on the canals, in order that the 
railroads may have an opportunity to monopolize the whole move¬ 
ment of the article.” 

It is, furthermore, any thing but creditable to the Empire State, 
which proclaims to the world that the Erie canal, is a national 
inland highway, where tolls are now charged merely for the pur¬ 
pose of its maintenance, that it should discriminate in its regula¬ 
tions between a foreign product and a home product. When a for¬ 
eign product has passed the Federal custom house and paid the 
Federal duties, it becomes in all fairness as much an article of 
American commerce as if it was originally of domestic origin ; and 
to single out, as has been done, the article of foreign salt, and 
charge an exceptionally high toll for its transport on the Erie canal, 
solely because it is of foreign production, is simply a piece of class 
legislation, and an act unworthy of a great State and an intelligent 
people. 

FREE CANALS. 

On the subject of freeing the canals from all tolls and charges, the 
Commission not being unanimous, make no specific recommenda¬ 
tions. 

It is the opinion, however, of at least one member of the Com¬ 
mission, that to advocate the making of the canals entirely free, 
and to require the expenditures necessary to administer and main¬ 
tain them to be paid out of tiie proceeds of general State tax¬ 
ation, is in effect to advocate the speedy abandonment and destruc¬ 
tion of the canals. Such an advocacy is substantially an admission 
that the canals have outlived the purpose for which they were origi¬ 
nally constructed, and that other agencies have come in, which can 
do their work cheaper and better. If such is the case, to contend 
against it is to attempt to overcome the action of natural laws; 
and there is no instance on record in modern history where State in¬ 
terference under such circumstances has been other than disastrous. 
It is furthermore a law or axiom in human nature and social econ¬ 
omy that men never highly value that which it costs them little or 
nothing in the way of direct effort or expenditure to obtain. Some 
years ago, one of the States of the Federal Union found itself in 
the possession of a fund for the support of its public schools, so 
large as, in a great measure, or wholly to relieve the school districts 
of the State from the necessity of raising money by taxation for 


64 


ordinary educational purposes. The result was that the school sys¬ 
tem and standard of public instruction in that State rapidly ran 
down, and the indifference of town and district authorities to the 
condition of their public schools became notorious. But let us rea¬ 
son further on this topic. To make the canals free, a constitutional 
amendment is necessary, and this cannot be obtained under any 
circumstances in a lesser time than three years. It is not by any 
means certain, moreover, that a majority of the people of the State 
New York will vote for any such amendment. A portion of the 
people of the State feel little or no interest in the canals; while 
the tide of public opinion is everywhere running strongly against 
the increase of taxation for any purposes, and in favor of restricting 
State functions and public expenditures within the narrowest feasi¬ 
ble limits. 

Suppose, however, a constitutional amendment making the canals 
free, and requiring the cost of their maintenance and administra¬ 
tion to be defrayed from the State treasury, to be adopted, and 
made part of the organic law of the State. The first one, two or 
three years, the annual appropriation might be voted by the legis- 
ture with a degree of unanimity. But how much shall be annually 
appropriated? The impolicy of a constitutional amendment limit¬ 
ing inflexibly the sum that can be expended in any one season 
under any circumstances on the canals, finds abundant demonstra¬ 
tion in the present experience. It left to the legislature, one legis¬ 
lature cannot bind its successors, and a key having been once pro¬ 
vided, whereby the public treasury can be readily opened under 
the plea of necessity, what effectual guarantee could be provided 
that the annual expenditures on account of the canals would not 
equal or be in excess of three millions, that were deemed necessary, 
and were used in 1873. Then would come disatisfaction on the 
part of the people, and charges of corruption on the part of one or 
the other of the political parties for political purposes. The rail¬ 
roads, the natural rivals of the canals, always a powerful interest in 
the State, and with the fresh grievance, that the State in making the 
canals free had discriminated unfairly against all other methods of 
merchandise transit through her territory, would openly or secretly, 
directly or indirectly, foment this dissatisfaction, and do all in their 
power to make the free canal policy a failure. The result of such a 
condition of affairs would be uncertainty in respect to expenditures, 
with a tendency to increase them ; uncertainty in respect to ap¬ 
propriations ; uncertainty in respect to general canal policy, ending 
in neglect of the canals, interference with or paralysis of their busi- 


65 


ness, general disgust on the part of the people, and an ultimate sale 
or abandonment of the property. 

But suppose these gloomy anticipations to be ill-founded. The 
question, at least for the present, is not even then reduced to the al¬ 
ternative of entirely free canals , supported by the State , or the ruin 
and abandonment of the canals. There is no evidence that the 
canals have outlived their usefulness, and are unable, under proper 
administration and judicious tolling to successfully compete in 
respect to the transport of an immense tonnage of staple productions 
against the railroads. 

On this point the Commission are unanimous, and believe that 
there is yet a large possible future of profit and employment for a 
judicious canal system as a means of transportation. The recent 
experience of France and Germany, as already shown, is evidence 
to the same effect. So is also the fact, that the English railways, 
among the best managed in the world, at present subsidize com¬ 
peting canals to maintain a maximum rate of toll; and that in spite 
of an active railroad competition, the English canals yet annually 
carry at a profit an estimated tonnage of some 23,000,000 tons. 
The present expenditure by the Dominion of Canada of very large 
sums, for the enlargement and perfecting of the Welland and other 
canals, is also demonstration, that in the opinion of the men of 
ability, who are directing such expenditures, the canal method of 
merchandise transportation is still able to successfully compete 
with any and every other existing instrumentality for effecting the 
same results. 

In reality, the people of the State of New York have never yet 
had an opportunity to find out and fully test the power and capacity 
for usefulness of their great artificial internal water-ways. For the 
first time, under the pressure of necessity, the canals are to be 
brought under the superintendence of one competent and respon¬ 
sible head; a condition which in all other industrial enterprises is 
regarded as the prime essential for the attainment of efficiency and 
success. For the first time, plundering, extravagance and misman¬ 
agement have practically ceased ; and irrespective of the labor and 
results of this commission, for the first time the wise step has been 
taken, of endeavoring to obtain information [touching the economy 
of the canals, by independent, and carefully conducted investigation 
on the part of persons reputed competent to do such work and 
devoid of all personal or partizan interests in the results of their 
inquiry. 


9 


66 


Again, the experience under the reduced tolls of the past year can 
hardly be accepted as a full and certain criterion for the future; but, 
as far as it went, it may be rightfully regarded as a success. The 
canals very nearly earned their expenses of administration and main¬ 
tenance ; and had there been a sufficiency of boats to meet the great 
demand for their use during the latter portion of the year, the receipts 
of the canals from tolls would have been considerably augmented. 
The further diversion of trafic from the canals was arrested, and no 
inconsiderable part of what in former years had been diverted, was 
regained. What the canals can do in another year, under continued 
low tolls, a better and simpler system of assessing tolls, and a wise, 
economical and concentrated superintendence, remains to be deter¬ 
mined. But the fact that some two hundred and fifty new boats 
are reported as at present in the process of construction, as compared 
with a register of only seventy-five new boats in 1876, is evidence, 
that the boating and forwarding interests, studying closely the 
future from a dollar and cent point of view, are confident that the 
business of the present calendar year on the canals will be an im¬ 
provement upon the last. The further fact pointed out by the 
President of the Buffalo Board of Trade that while from January, 
1868, to January, 1877, the freight on flour per barrel by rail from 
Buffalo to New York was never less than 30 cents per barrel ; while 
the canals during the past season carried flour in boat-load lots from 
Buffalo to New York, for twenty-two cents per barrel and to tide 
water on the Hudson for eighteen cents per barrel (the existing tolls 
in both instances included), is also demonstration that the canals 
in respect to this one article, in which the canals for years have 
been at disadvantage, do not stand in any special :ieed of fostering 
by the State to enable them to withstand railroad competition. 

If the canals, with a rate of toll bearing so lightly as not to prove 
obstructive on the immense traffic that tends to pass over 
them, can be made to provide for their own expenditures ; 
or for their expenditures in part, they can prefer no more 
valid claim for exemption from such obligations, at the expense 
of the public treasury, than any other industrial, or business enter¬ 
prise in which the public in all or part find an interest. And until 
further experience is gained in respect to this matter, it would 
seem to be the part of wisdom for those who have the continued use 
and prosperity of the canals really at heart to allow the question of 
freeing the canals to remain in abeyance. 

In expressing the above views, the Chairman of the Commission 
desires to have it distinctly understood that he speaks for hims If 


67 


alone. His associates on tlie Commission do not concur with him 
in opposing the tree-canal movement; but on the contrary, are in 
favor of referring this whole question, at an early day, to the people 
of the State for consideration and determination. 

Conclusion. 

In conclusion the commission would acknowledge their obliga¬ 
tions to various State officials—more particularly to the Comptroller 
and the’Canai Auditor—and to gentlemen interested in the canals, and 
grain and produce business, both within and without the State, for 
their ready co-operation and supply of information. The task 
intrusted to the Commission has been by no means an easy one; the 
held to be occupied has been almost a new one, and the 
data requisite for forming an opinion in respect to many 
points are yet very imperfect, or almost wanting. In 
fact until the fiscal and calendar years of the canal 
operations for 1877 had closed, and the statistics of tolls, and 
traffic had been collected, verified and tabulated by the Canal Auditor, 
it was hardly possible to commence the investigation at all ; and 
the results of another year need to be submitted to careful examina¬ 
tion before any one, as the result of any amount of other considera¬ 
tion, can render himself fully competent to express a confident 
opinion as to the future. 

Respectfully submitted, 

DAVID A. WELLS, 

L. J. K STARK, 

WILLIAM THURSTOHE. 

To the Canal Board of the State of Hew York. 

Albany, Febi'uary , 1878. 



APPENDIX. 


Relation of the Canadian and New York Canal Systems. 

The following statement (prepared by Hon. William Thur- 
stone, Secretary Buffalo board of trade, and a member of the 
canal commission), respecting the Canadian canals, their 
enlargement and prospective relations to the New York canals, 
and the trade of the State, and (more especially), of the city of 
New York, is also submitted for the consideration of the canal 
board, and the Legislature : 

With the completion of the Welland canal, enlarged so that 
vessels of about 1,800 tons cargo capacity can pass through 
it, instead of 600 tons cargo capacity, as at present, with the 
same low tolls as are now imposed, and a very small increase 
in the cost incident to the traffic, relatively to the greater 
quantity of freight carried, it is reasonable to conclude that 
the rates of freight from Chicago to Kingston on wheat will be 
lessened at least one-half—that is from about seven and a quarter 
cents to three and five-eighths cents per bushel—tolls included. 
Vessels will then have the choice of sailing through Lake On¬ 
tario to Kingston, with their cargoes, if they can make more 
money than by discharging at Buffalo, or some American 
port on Lake Ontario (Oswego for instance). Hitherto, the 
larger class of vessels have been compelled to bring their car¬ 
goes to Buffalo. The inability of vessels of the largest size 
to enter Lake Ontario by the present Welland canal has cer¬ 
tainly saved the commerce of the canals to the State up to the 
present time, while burthened with heavy canal tolls. 

The merchants and people of the North-West confidently expect 
that a large direct trade will be carried on to and from western 
ports with Europe and other countries when the whole length of 
the Canadian canals is completed, and that it will no doubt be tried 
when the Welland canal is finished, without waiting for the enlarge¬ 
ment of the St. Lawrence and other canals. 



70 


Ocean freights, from Montreal to Liverpool, during the season of 
navigation, are nearly the same as those from New York, Boston, 
Baltimore and Philadelphia. The distances by the New York and 
Montreal routes, from Chicago to Liverpool, are respectively as fol¬ 


lows : 

From Chicago to Liverpool via Lake Erie, Erie canal, Hud¬ 
son river to New York, 1,502 miles; N. Y. to Liverpool, 

2,980 miles... 

From Chicago to Liverpool via Lake Erie, Canadian canals, 
to Montreal, 1,418 miles; Montreal to Liverpool, 2,763 
miles. . 


Miles. 

4,482 

4,181 


Saving of distance in favor of the Montreal route. 301 

With a greater demand for return cargoes from Liverpool to 
Montreal, ocean freights would probably be lower as there would be 
more competition and the expense of the round trip would be very 
greatly diminished. Of course western merchants and producers 
would do all they could to accomplish this result, there being pro¬ 
verbially “ no friendship in trade.” 

When the enlarged Welland canal is completed, it is expected 
that a large portion of the .supplies of grain for the New England 
trade will avoid the canals and be taken through the port of Ogdens- 
burgh, in consequence of the diminished cost of freight by that 
route. 

It may be assumed as a fact that in future English capital will find 
its way; in an increased volume, to the west, and be there used to 
purchase grain, pork, lard and other articles, for English and conti¬ 
nental consumption, as well as for the West Indies and South 
America. The direct importation of goods of all kinds from these 
places to Canada and the West would be another factor in the enter¬ 
prise. The low rate of interest for money, in England, in com¬ 
parison with that prevailing in the United States, becomes an ele¬ 
ment of great importance when brought to bear upon the question 
of competition between the routes through Canada on the one hand 
and the United States on the other. The opinion of a large pro¬ 
portion of the most thoughtful commercial men, in the State of New 
York, is that the best energies and foresight of the people of this 
State are needed to meet our northern competitor, especially in view 
of the fact that in a few years vessels of large tonnage will be able 
to make direct navigation from the upper lakes to the ocean. The 
size of the locks, when fully completed on the Welland and St. 
Lawrence canals, will be 45 feet in width and 270 feet in length, 






n 


with 14 feet of water on the sills, and the width of the canals 100 
feet at the bottom. 

The retention of the bulk of the trade of the northwestern States 
by the city and State of New York depends on the cost of transpor¬ 
tation upon the canals of our State, and the tolls must be kept at 
the lowest point to meet the competition of the Welland canal, Lake 
Ontario and St. Lawrence river route. The increased capacity of 
vessels passing through the Canadian canals will correspondingly 
decrease the cost of moving grain. 

The tolls on the Welland canal, including the right to pass the 
other canals free, are ten cents per 1,000 pounds, or six mills on 
wheat, five mills six fractions on corn, per bushel of 60 and 56 
pounds respectively. The average time consumed in passing 
through the present Welland canal is forty*eight hours by sail and 
twenty-four hours by propeller or steamer. 

The estimated expense for enlarging the Welland and St. Law¬ 
rence canals and deepening the bed of the St. Lawrence river so as 
to permit vessels of fourteen feet draft to navigate their waters is 
$30,200,000 — of this amount there is work under contract for $12,- 
860,000. These facts show how strenuous are the exertions made 
by the Canadian government to wrest from us the prize of the 
western trade, and it is of the utmost importance to the people of 
New York that they should know that decisive measures are abso¬ 
lutely necessary and should be immediately taken to maintain the 
commercial prosperity of the Empire State by fostering in every 
way her canal interests. 

It is impossible for the largest craft now navigating the lakes to 
pass through the Welland canal, but if the trip can be made at a 
profit by vessels of a smaller size, that route will be taken. The 
slow movement through that water-way for a few miles will be 
counterbalanced by other considerations, including the inducements 
to be found in the saving on the trip, as a whole, to tide-water and 
by return freights to the west. These facts are important. If own¬ 
ers of vessels find that they can obtain freight to Oswego or Ogdens- 
burgh at remunerative figures, and these rates pay them better than 
Buffalo rates, they will seek these ports, and thus a large proportion 
of tolls and trade will be lost to the State of New York and pass 
through a part of Canada and over Lake Ontario. 

When the Welland and other canals are enlarged ocean vessels 
may be seen on our lakes, and our shipbuilders will construct ves¬ 
sels adapted for both lake and ocean navigation, as the present craft 
go out of existence by age or disaster. If there is profit in the in- 


72 


vestment, English capital will be readily found to take advantage of 
the situation. 

Whether the State of New York, and the cities of New York, 
Buffalo, Albany, etc., can retain the commerce of the canals of the 
State, even with a free canal, is the question of the hour. There is 
reason for doubt and alarm, but it is our duty to postpone the evil 
day as long as possible, or adopt some plan to ward it off altogether. 
If tolls on the canals are still further reduced or abolished, the 
water deepened, locks lengthened and widened, and steam applied 
as a motive power either by the Belgian cable system, or by propel¬ 
ler boats with “ consorts ” so as to reduce cost of movement, much 
will be done to aid the State in maintaining her commercial suprem¬ 
acy. 

The lakes and canals are the cheapest and most useful means of 
transportation. If the merchants of Chicago, Milwaukee and other 
Western cities find it their interest to send grain to Europe via 
Montreal, purchasing abroad articles for consumption as return 
freight, they will do so if transportation rates are cheaper than by 
the New York route. 

When her enlarged canals are completed, Canada will, for nearly 
eight months of the year, possess the most perfect system of inland 
navigation in the world. The work on the Welland canal pro¬ 
gresses steadily, and the canal will soon be ready for navigation. 
It will be the finest work of internal improvement on the American 
continent. 

The distance from Chicago to Montreal via the Welland and St. 
Lawrence canals is 1261 miles; the distance from Chicago to New 
York via Buffalo and the Erie canal is 1419 miles—or 150 miles 
in favor of the former route. The route first named has 70 miles 
of artificial navigation, with 56 locks and a total lockage of 564£ 
feet; the second 350 miles, 72 locks and 654 feet lockage. Thus 
there are 16 more locks and 89J more feet of lockage on the New 
York than the Montreal route, with the advantage of a stronger 
current also in favor of Montreal. 

Time is an important point to be considered in comparing the 
routes. A cargo of grain is brought to Buffalo from Chicago by 
propeller in about five days; allow one day for elevating and trans¬ 
ferring to canal boats at Buffalo; then eleven days trip (by mule 
power) on Erie canal to tide-water and two days for towing from 
thence on the Hudson river to New York — altogether nineteen 
days. From Chicago to Port Colborne, the usual length of a trip 
by a propeller is five days; thence by Welland canal to Port Dal- 


73 


housie, Lake Ontario, one day; thence to Kingston one and a 
quarter days ; one day may be consumed there in transferring cargo ; 
thence from Kingston to Montreal by barges the time is three days 
altogether eleven and a quarter days ; thus showing a gain of seven 
and three-quarter days in favor of the Montreal route. (The time 
on the Erie canal is shortened about three days when steam is used.) 

The average rate of freight per bushel of wheat from Chicago to 
Kingston during the season of 1877 was seven and a quarter cents 
by sail or steam, and from Kingston in barges (carrying 16,000 to 
20,000 bushels) to Montreal uniformly three and a quarter cents; 
altogether about ten and a half cents, including half a cent as toll 
on canals and half a cent for transhipment at Kingston. The barge 
generally is taken alongside the ocean ship and three-quarters of a cent 
pay all remaining expenses. Ocean freights vary according to supply 
and demand for vessels ; and the rates do not, to any noteworthy 
extent, differ from those prevailing in Kew York. The storage 
capacity of Montreal is 2,000,000 bushels of grain, and 200,000 
barrels of flour. About ninety per cent of the grain shipped is 
purchased on English orders for cash, at western ports, and ten per 
cent on owner’s account consigned to Great Britain and Ireland. 

One of the reasons why the Welland canal has not been a more 
active competitor for the grain traffic of the west, for several years 
past, is the fact that its cargo capacity is limited to 600 tons vessels ; 
hence the owners of craft of small tonnage, that used to carry grain 
to Oswego, do not find it profitable to engage in the trade in com¬ 
petition with the large propellers, barges and sail vessels that enter 
the port of Buffalo. 

The cost of moving property by the Welland canal route in the 
future will certainly not exceed the minimum cost that can be 
charged by the Erie canal route in its present condition ; terminal 
charges, ocean freights, etc., being equal. 

Thus keen competition is certain when the Canadian canals are 
completed. Canada and England will then strive for the internal 
carrying trade by the lakes from the Western States, and the per¬ 
sistency, energy and financial ability of England are so well known 
as to leave scarcely a doubt of the ultimate success of the movement 
unless it is promptly met by corresponding efforts on our part. 

In the Kew York Produce Exchange Beport, for 1874-75, it is 
stated that “ Practical experience has demonstrated that large vessels 
or ships can carry property more cheaply than small ones, the rates 
of cheapness being in about the proportion of the increased 
tonnage measurement. An increase of 150 per cent in the 
10 


74 


capacity of vessels navigating the lakes and the Canadian 
canals, cannot but largely augment the ability of the St. Law¬ 
rence route to carry property at very largely diminished rates 
of transportation. The transportation rates on the Erie canal 
can only be further reduced to the extent of about seventy 
cents per ton by the abrogation of tolls except by enlargement. 
With the non-enlarged Erie canal and the enlarged Canadian 
canals, the power of competition will be unequal.” The same 
writer intimates that it is a question to be solved in the future, even 
with the introduction of steam propulsion of boats or the Belgian 
cable system, together with the abolition of tolls, whether the Erie 
canal can compete with the Welland and St. Lawrence canals 
without an enlargement of considerable capacity. 

It is certain that hereafter, no more lake vessels will be built— 
only the larger class of vessels can make a profit. In a few years 
the former will be swept away by wreck or old age. The “ consort ” 
and “barge” system will doubtless be improved upon, thereby 
lessening the cost of transportation. 

The exigencies of the Canadian canals may require an increase 
of tolls, but the leading idea is to collect no more revenue from 
tolls than will be sufficient to keep the canals in repair and repay 
the cost of management. It is generally understood, however, that 
if the interest of the route demand it, tolls on the Canadian canals 
will be entirely abolished on vessels and cargoes en route to Cana¬ 
dian ports. 

The only drawbacks or objections that have been started against 
the success of the enlarged Welland and St. Lawrence canal route 
in competition with the Erie canal are : Whether vessels of the 
enlarged capacity can successfully be floated on its waters ; whether 
the trouble of entering and leaving the locks will not cause too great 
delay and be accompanied by great danger to the lock gates; 
whether the length of time required to pass through the canals will 
be so far increased as to take off the profit of the trip; and whether 
in the absence of return freights from Kingston, vessels will have 
to seek them from Oswego on Lake Ontario, or Buffalo, Cleveland 
and Erie on Lake Erie, thereby losing time and profit. 


REPORT 


OF THE 


COMMISSIONERS 


INVITED BY THE 


CANAL BOARD OF THE STATE OF NEW YORK, 


JULY lOth, 1877, 


TO CONSIDER AND REPORT ON THE SUBJECT OF TOLLS UPON THE 
CANALS, HAYING REFERENCE TO THE SUBJECT OF REVE¬ 
NUES, AND ALSO TO INCREASING THE COM¬ 
MERCE OF THE CANALS. 


DAVID A. WELLS, 

L. J. H. STARK, 
WILLIAM THURSTONE, 


| Commissioners. 


ALBANY: 

WEED, PARSONS & COMPANY, PRINTERS. 

1878 . 





























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